There are some 40 million Mexicans who are excluded from certain financial products due to banks not thinking it is a segment worth going after, but Filiberto Castro does.
The former banking executive worked at banks including Citi and Scotiabank for nearly a decade before moving into the fintech space to be chief of growth at Konfio. That’s where Castro said he saw how well technology could help people access financial services that were previously out of reach.
He met his co-founders David Hernandez and Amran Frey at Konfio, and, along with Israel Garcia, started Aviva, a Mexico-based fintech startup focused on bringing working capital to unserved communities.
Aviva’s approach uses artificial intelligence and natural language processing to match customers’ spoken word to the fields of a real-time credit application. Within minutes, customers can qualify for a nano-business or house improvement loan of up to $1,000.
Unlike other fintechs that are concentrating on large, urban areas, Aviva is concentrating on smaller communities where the company can address the lack of trust in banks, predatory interest rates and help users who may not have the technical ability, like a smartphone, to purchase financial products directly.
Now buoyed by $2.2 million in pre-seed funding, the company is rolling out a network of physical and digital onboarding kiosks. The five-minute “video call booths” use biometrics and biosignals to determine the client’s risk and willingness to pay in order to underwrite the loans.
“No one has done anything for this segment in the last 25 years,” Castro told TechCrunch. “Much has been done in big cities, but by creating deep tech, AI and the video calls, we can establish elements to examine credit and lower interest rates. This has the potential to create a new middle class in Mexico and later across Latin America.”
The company makes money from financing the interest on the loans, but is able to charge less than current banks. Average interest rates in Mexico can get as high as triple digits, but Aviva is able to charge around 80%, though still high, he added.
Aviva is still very much in its early stages. It launched its product in November with 10 employees and has three kiosk locations where more than 500 customers have passed through since. The kiosks are located in Chalco de Díaz, Ixtapaluca and Texcoco, towns about an hour’s drive from Mexico City. The company is also seeing a lower percentage of loan delinquencies than initially thought, Castro said.
The pre-seed was led by Wollef Ventures, which was joined by Newtopia VC, Seedstars International Ventures, 500 Startups, Magna Capital VC, Xtraordinary VP and a group of angel investors.
With that new capital, Aviva is going to invest in building out its credit and underwriting system, preparing to launch the company’s own credit card and expanding its kiosks. In the future, Castro also sees the company providing a full banking offer to its customers.
“The credit card will give us a way to deposit loans if customers don’t have a bank account,” he said. “That is great for us because it shows we are tackling the right segment — people who don’t have any relationship with a bank.”