Prestanomico is a Mexican embedded fintech platform offering Lending-as-a-Service (“LaaS”) to companies that seek to provide direct credit originations to their existing customers or employees in Mexico through digital channels. We sat down with Guillermo Gomez del Campo, Founder, CEO, and Executive President of Prestanomico, to discuss Prestanomico partnership with Uber, lending-as-a-service, and their work with Percent.
What aspects of average credit access in Mexico prompted you to create Prestanomico? What gaps did you see in the Mexico market that compelled you to act?
Personal credit in Mexico is scarce and expensive relative to other emerging markets. The legacy distribution model using physical distribution and salesforces is just too costly and inefficient. As a result, people lack the right financing options and underinvest in their well-being. This is especially true for gig economy workers with unpredictable incomes. Our solution tackles every one of those challenges to provide accessible and affordable credit for responsible consumers.
Recognizing the volatility and employment shocks caused by the global pandemic, how did Prestanomico fare during this period?
We did surprisingly well given the size of the shock. Independent workers, our target segment, are resilient by nature. They typically have more than one source of income and adapt rapidly to changing environments. As a company, we were also flexible and resilient. We supported our clients with an interest-only payment period which is built into our product, and they responded well with repayments after that. Amazingly, our 2020 vintage performed better than our 2019 vintage.
What sparked the partnership with Uber? What about Uber’s business model was particularly appealing?
We are both obsessively focused on the customer experience and on providing innovative solutions for people’s everyday needs. Uber drivers and couriers are independent and entrepreneurial, and financing allows them to improve their tools of work. Through this partnership, Uber is able to provide a valuable benefit to its drivers and couriers, and Prestanomico is able to leverage the platform to achieve better underwriting and collection results.
Why has Prestanomico focused on the lending-as-a-service market in lieu of solely direct lending?
We were fortunate early on in our journey to strike a couple of great strategic partnerships with companies that recognized the value of our digital lending platform, and that led us to invest disproportionately in tools like APIs and flexible product frameworks. As the embedded finance revolution gained steam and gig economy platforms became interested in offering loans to their workforce, our lending as a service platform became a strong competitive differentiator.
Can you describe how technology has transformed the lending-as-a-service market?
The days when the best financial services were provided by global banks are over. Technologies like cloud computing, APIs, and artificial intelligence have enabled more nimble players like Prestanomico to develop best-in-class solutions for important verticals like lending. And consumers have learned to expect financial services to be integrated into a variety of apps. Last but not least, private debt platforms like Percent allow players like us to have access to the required financing to compete at scale in markets that previously required retail deposit gathering. That is the beauty of the fintech revolution.
From a growth perspective, what future developments are you looking forward to most in the coming 12 months?
I believe that the market for work is undergoing profound shifts, with marketplace platforms for everything from food delivery and ride sharing to professional services like accounting or mental health, allowing people to make a living on their own flexible terms. As these platforms compete to attract and retain the best workers, they will look for ways to provide them with benefits in the way that corporations do for their employees. This revolution will propel the market for embedded finance. We aim to become a leader in that space.
How has Prestanomico benefitted from partnering with Percent?
Percent has driven us to develop a more institutional structure and approach to our funding strategy. From the formalities like a trust to hold our loans as collateral for the funding we receive, to financial tools like FX hedging, and detailed credit and risk surveillance tools, we have raised our game together.