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Brazil’s revolution of secured personal loans

Sergio Furio, Founder and CEO at Creditas, is leveraging his recent infusion of $50 million VC to make the most of 2018 for the people of Brazil who need personal lines of credit.

Founder and CEO at Creditas, Sergio Furio

Who would get excited about an extension of personal credit? The people in Brazil who had been accustomed to the horror of 120%APR on personal loans and 480%APR on revolving credit cards before Creditas disrupted the personal loan market in Brazil, that’s who.

Creditas is a bank correspondent startup that does not have agencies, and they allow people to use their houses and cars as collateral to initiate secured personal loans, typically offering home equity loans at 17-25% interest and auto equity loans at 23-50%.
In addition to loan origination fees and servicing fees, Creditas also makes money on the tranches that supply the loan funds.
Overhead is low, as their process is digital, and their default rate is less than 1%, as people are using their valuable goods as collateral.
Their target market is large, due to the fact that of the 55 million households in Brazil, approximately 75% own their homes and 30 million have 100% equity in these homes.
Already, Creditas is one of the largest Fintech companies in Brazil, along with Nubank and GuiaBolso.
Founder and CEO at Spiralem, Bruno Diniz

Founder and CEO of Spiralem, Bruno Diniz, a fellow fintech frontrunner and startup mentor, told Quarterly Tech in an interview that “The Creditas case is a great one! Their model is interesting because they are able to offer cheaper credit, based on collateralized debt. Here in Brazil, it is quite difficult to make such loans, and they have been able to make this process easy and automated. Many large VCs are investing in the company: Vostok Emerging Finance (VEF), IFC (fintech arm), Quona Capital, Redpoint Ventures, etc. They will be raising additional capital in 2018 as well.”

Sergio spoke at an event in Sao Paulo, which Bruno’s company helped to organize, and is an avid startup mentor in the Fintech scene there.
In particular, rolling over the new year, many families are assessing their finances and goals for 2018, so Creditas’ options will help many of them find personal loans to achieve their new year resolutions.

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