How LafargeHolcim empowers the un- and underbanked through fintech solutions

Latin America

“Our typical customers are low-to middle-income earners between 35-55 years old, often in need of urgent home improvement, such as fixing a leaking roof or expanding their home for a new baby. Unfortunately, there is a common misperception among Mexicans that getting credit is difficult. I want to change that,” says Guillermo Gomez del Campo, CEO and founder of Prestanómico, Mexico.

The un- and underbanked population (individuals and organizations with either restricted or no access to financial services) have limited opportunities to build prosperity. For many individuals, this could mean not being able to send their children to school or, as Guillermo says, “providing a safe, comfortable home for your family.” For businesses, this often results in lost sales opportunities due to lack of inventory and cash flow. 

According to the World Bank, over 1.7 billion adults (45% of the world’s adult population) are unbanked. The reasons vary. On one hand, traditional banks do not serve this customer segment due to their lack of credit history and low income. On the other hand, the un- and underbanked choose to not open an account due to high banking fees, their own distrust and inexperience with financial institutions, or geographical barriers, as most banks are located in cities, not rural areas where many financially unprivileged people live. This is the unfortunate reality for many family-owned businesses, including many franchisees of Disensa --LafargeHolcim’s retail network in Latin America.

“Small and medium-sized enterprises (SMEs) do not have the credit history or documentation requested by the traditionals banks. Credisensa understands our needs and provides affordable and accessible credits,” says Ruben Avila, retailer, El Conchero.

Credisensa, a joint venture of Disensa and Maqer--LafargeHolcim’s open innovation platform--is committed to democratize banking and financial services. Powered by fintech startups, including Centeo, Aliatu and Prestanómico among others, Credisensa offers retailers (B2B) and end-customers (B2C) affordable credit solutions. Before Credisensa, the financially underserved retailers were struggling with illiquidity, debt and lack of inventory. Partnering with fintech startups is a win-win as it reduces bad debt for LafargeHolcim while helping retailers to improve their cash flow, manage their inventory and establish a credit history. Today, our Disensa retailers supply building materials not only to private customers, but also to major construction companies doing large construction projects.

“Having access to credit is crucial. Small business owners like myself often have scarce resources. Credisensa is a great ally as they promote growth by helping us to buy products on credit. This way we never have to miss out on a sales opportunity,” says Eduardo Navarro, retailer, Guadalajara, Mexico. 

Credisensa’s loan application is easy, whether it is B2B or B2C. For example, our B2C customers fill out a form, which takes on average four minutes or less. Leveraging Artificial Intelligence (AI), Prestanómico pre-approves (or declines) the loan immediately. The fully automatic process helps the startup to keep interest rates low, compared to those of traditional banks, who have not yet adopted such technologies. Finally, the customers are asked to submit three documents: ID, income statement and proof of domicile before receiving credit. The B2B loan application, too, is fully digitalized and through the startups Aliatu and Centeo, LafargeHolcim guarantees its retailers credit within 48 hours or less provided their application is approved.

“We used to have a high debt. Aliatu gave us leverage and got us where we are today--up to date on payments and with a good credit score. In this time of pandemic, it helps me run my hardware store”, says Janeth Granados, Girardot, Colombia. 

Matthew Meehan, CEO Centeo, Mexico: “Before founding Centeo, I worked for 15 years in the banking/financial sector and I was always frustrated with their rigid legacy system and inability to adapt to new technologies. It is amazing to see how LafargeHolcim, with over 100 years of history, is eager to embrace new innovative solutions for their customers and collaborate with startups like Centeo.”

Adopting fintech solutions is a game changer, especially in emerging markets where the population is expected to spike. Our retailers play an instrumental role in helping us to provide safe, affordable housing and infrastructure--a demand that, despite COVID-19, remains strong. Innovating with local startups and customers to build bottom-up initiatives, LafargeHolcim also provides e-wallets, micro-credit and remittance services in Asia, the Middle East and Africa.

Going forward, LafargeHolcim is scaling these initiatives to cater to more financially underserved families and individuals, and unlock prosperity for all.

 

Author: Felicia Noreskar

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