The Colombian provider Juancho Te Presta offers investors a new type of loans with a 17.5% return p.a. „We have a lower share of nonperforming loans than banks and other non-bank competitors,“ says CEO and co-founder of the company Juan Esteban Saldarriaga, who was answering our questions below.
What kind of loans will you offer on the Bondster newly?
Juancho Te Presta (JTP) has been structuring alliances with retailers to help their customers acquire products and services with loans using Juancho’s technology and processes. We have closed agreements with a mayor home repair retailer, one of the biggest motorcycle distributors, plus other smaller retailers in cell phones, auto-repair and bicycle and mobility services. Interest rates in the platform for investors will be 17.5%.
What kind of clients do you focus on with your loans?
Juancho Te Presta has been focusing on “buy now pay later” solutions for our retail partners, but also being a complementary offer to payroll debit originators, who need to close agreement with employers. Our model bring confidentiality in the employer-employee relationship and helps customers get longer and bigger loans for major improvements to their home, for transport, health or to keep on progressing as middle class needs evolve.
Could you please describe your risk management policy and related procedures?
Our biggest asset is to use alternative data and social security information to assess our customer base. We have developed a proven protocol to prevent fraud and are the 1st fintech in Colombia to have been using open banking (connecting people´s bank accounts) to our decision-making algorithms when we cannot find social security information to prove income.
We were also the 1st to use GAFI regulation compliant video streaming for ID validation. Our cloud decision engine incorporates information from the two credit bureaus in Colombia (Experian and Transunion), and three Social Security information providers, plus fingerprinting information from devices and customer application data. We use group “customer fraud redflags” and use 2 scorecards (one for women and one for men) using specific variables both for sex and employment/gig profiles. We take into account time in job, income and payment history.
What people usually borrow money for?
In the 6 most uses of Juancho are: "for my business", "for house improving", "for studying", "for transport" (buy motorcycle).
What is your competitive advantages?
We are the 1st fintech to be lending up to 24 months amounts in excess of 100 USD, with an 100% online process with disbursement in less than 24 hours, plus the possibility of using the loan in our retailer network.
What is your position on the market?
JTP was launched in November 2019, and has done most of its origination during Covid, in one of the toughest lending environments ever. Our algorithms and processes have proved we are in the right track, targeting with a bias towards women. Our nonperforming loans (NPLs) have been performing better than our competitors and banks.
What opportunities people have to borrow money and what is specific for them?
We are giving women lower monthly instalments and bigger amounts than the average men. We are helping younger people create credit history with Juancho, and we are helping retailers jumpstart back their sales.
Could you please describe your company shortly?
We launched in December 2019, have issued more than 2,500 loans, we have disbursed more than 1M USD and we have processed more than 60K applications and during 2020 had 600K visitors to our website with more than 80K registered. Our average loan is 21 months for 400 USD. 60% of our customers are women. Our 90-day NPL is under 8%. Our team is comprised of 20+ employees with ample experience in retail, fintech and finance. The company is on course to breakeven in the middle of 2021. We are currently implementing origination partnerships with a couple financial institutions.
Is lending in Colombia subject to any regulations?
We are a non-regulated financial fintech, supervised by the Superintendencia de Industria y Comercio for the issuance of commercial/consumer loans. We are part of the industry group ColombiaFintech.co and as long as we do not receive money from the public, we do not need a license to lend. More information is available at our webpage JuanchoTepresta.com.
Have you been affected somehow by covid-19 pandemic?
Scaling in full covid lockdowns has been one of the biggest challenges the company will have. We were able to adjust our scorecards on the fly given our cloud decision engine and the use of social security information from 3 different providers, giving us up-to-date information of employment status. Our bank scrapping functionalities provided and extra edge that other lenders have still to catch up.
Would you like to share anything with investors on Bondster?
JuanchoTePresta.com is addressing the need of thousands of middle-class employees and gig workers, who have been underserved by Colombian banks or served by informal shark loans. We provide instalment loans for up to 2x salary/income with tenures up to 24 months. We have finetuned our credit algorithms to minimize friction but maintaining a thorough KYC (Know Your Customer) guidelines.
We were the 1st fintech in Colombia to use electronic video streaming biometrics and “bank scrapping capabilities” to assess and validate our customers. We are also the 1st fintech on the market to have a product tailored for women, with special scorecards to better understand their risks and price accordingly. We use alternative data from social security and other databases to correctly approve 1 out of 5 applications.
What are you projections for the next quarter in terms of issued loans?
We are planning on growing 10% every month on new loans. We want to go 5x in terms of loans disbursed in 2021.
Are you planning to introduce any new products to your customers on Colombian market?
Yes, we are working with one of the biggest distributors of motorcycles to take our loans to 48 months.