Afluenta, the Startup that is humanizing the Access to Credit in Latin America
Afluenta, the Startup that is humanizing the Access to Credit in Latin America
The platform Alfuenta is the first collaborative finance network in Latin America and chosen as one of the winners of the first edition of the contest I3 LATAM: Boosting Social Innovation in Latin America, a contest developed by the Swiss Agency for Development, Ashoka, Hystra and New Ventures Mexico to find entrepreneurs who focus in solving social issues of the area.
What is this Argentinian startup’s goal? Their mission is to promote a simple, safe and transparent finance culture through the development of innovative products that help people manage their money in a more humane way.
In the platform, people can ask for credits and at the same time, the investor has an alternative of investment that is competitive and sustainable. Each investor has the opportunity to get to know the projects of each of the solicitant and of those who credit him, they get better loans and in better conditions than with any other alternative.
“We are proud of the fact that we can offer such an innovative service from Argentina, whose goal is to humanize and facilitate access to credit and investment through people without going to a bank. The main idea is to bring people together in a way that they can solve their financial needs in a more fair way by boosting the social abilities we all have” Alejandro Cosentino explained, founder and CEO of Alfuenta.
Consentino explains that the mechanism to assign credits nowadays isn’t democratic.
“Maybe there’s a misunderstanding about the fact that banks don’t lend money but in general those who don’t get credits is because they have a certain characteristic that doesn’t make them eligible. What we have to do is educate people to make them organized with their finances and keep their payments up to date so that they can get a credit when they need it” he said.
The platform gives information to clients, to educate them about general aspects of access to credit.
“We give them an immediate reply, we take twenty seconds in replying to someone. This is amazing in the traditional financial world, it also shocks social entrepreneurs because they cant believe we are so efficient and fast in giving people a service, and all of this is thanks to technology” he told us.
It is worth noting that Alfuenta operates through an ordinary trust of management regulated by the Law 24,441, where investors are fiduciaries and Alfuenta the fiduciary agent. The loans are given by the trust with resources given by investors and according to their instructions.
“Alfuenta, in compliance with article 5 of the Law 24,441, is registered in the Register of Ordinary Public Trustees of the National Securities Comission (CNV for its acronym in Spanish) under the number 11 according to the resolution 16,895 of the 4th of September of 2012. This resolution gives Alfuenta the possibility of offering its services publically under the control of the CNV, but that organism doesn’t approve or control the contracts of trust that the fiduciary receives” Cosentino explained.
The distinction received comes to the startup at an ideal time, when they are looking to expand:
“We are celebrating our second year of existence and we are making 1 million and half pesos a month, growing every month. In a few days we will get the one thousand loans, we have 800 investors, and through the platform around 60 thousand transactions of investment have happened. 75 investors finance every loan, in average. We know the platform, the solid technology, and clients like to invest, they like to help people. We have very good quality indicators, customer and collection services, and we are now planning the expansion of the company, Ashoka and New Ventures are helping us, giving us a push to access other markets in Latin America, Mexico, Colombia, Peru and also Brazil. They think we can make a difference in the life quality of the people who receive our financial services or products of investment” he told us.
Being one of the 10 winners of I3 LATAM, Alfuenta is also the only entrepreneurship FinTech (term for financial businesses that use the help of technology) among the winners. This shows how finances among people (P2P), also known as collaborative finances, have become an alternative to banks in the area and are among the favorites for investors during these days.
“What I see about Fintech technology throughout the area is that it is starting to help technology in ways client need to make things happen. People like cheaper, quicker and less bureaucratic loans, and that is what we are doing. When I say quick I mean really quick and when I talk about a website I mean online, free and confidential” he points out.
Conestino says that in a few days a service will be launched that allows each person to fill in a self-evaluation.
“In general people don’t know if they have a credit or not, and they just wait for a reply; the reply takes time and a significant amount of effort because you need to take your documents to the bank, make a line, see the person in charge and after he doesn’t reply you have to call him. We created an online, confidential and free service in which you give your ID and the website tells you if you can get a loan or not. Twenty seconds, nothing more than that. We have a ranking that tells us how your credit profile is: if its really good, good, average, or if it has anything the consulting client knows about” he noted.
What do these banks and financial entities do with the advance payment from Fintech? Cosentino explained that banks are usually very old and huge structures where innovation is hampered by bureaucracy.
“We are not only smaller and quicker but we do the same things as they do in a faster and cheaper way. We are smaller and we have more incentives. Did institutions approach us? Yes. But we want to stay independent. If any bank wants to manage loans in the way we do it we give them those loans, we help them, our goal is to make financial loans more accessible, and easier for people” he explained.
Thinking about Latin American customers implies considering a large group of people that don’t use banks, and at the same time, those who do don’t trust their finances to online platforms. Consentino explains that because they are a small company that is financed by venture capital of shareholders without getting any profits, they need to be very careful about how they spend their money in operations.
“In the world there were until now companies that made profits and others that didn’t, the ones we know as NGOs. However now there are companies like ours, which want to get profits but are also looking to create a social impact. This social impact is to get the products we developed to places where they didn’t exist before so that people can have a better life quality with better finances. For them we need to develop some type of technology and tools that will allow us to reach those places at a low cost. Because if I don’t get to those places with a low cost the product cant be taken there” he concluded.
As for the fact of making the decision of administrating your finances online, Cosentino says that one of the most important values of Alfuenta is trust.
“I think we have developed, in the group of customers we have, a trust that has being key for people to use our services and expand them. From the investors side there is a trust when they are sure that people are going to pay them and that sort of thing but as time goes by and people realize comments are good, and that credits are being paid for, that the investor is getting his money back and taking it to make more money, then the link becomes stronger. On a different note there is an evangelization effect that is necessary because companies like ours don’t have a huge budget for publicity. These are all factors that make growth progressive” he pointed out.
Thanks to the award received, Alfuenta’s case will be presented in Silicon Valley, where Consentino will be linked to an acceleration program with the leaders of the industry. The company will also be presented in the next edition of the Latin American Forum of Investment of Impact (FLII in Spanish) which will be held in the city of Merida, Mexico in February of 2015.