Zenfi has launched a new currency to bring Mexicans financial peace

Luis Rubén Chávez, founder and CEO of Zenfisaid that consumer spending in Mexico and Latin America was “absolutely broken.”

“Achieving financial health in Mexico for about 50 to 60 million people is very difficult,” he told TechCrunch. “Two out of three Mexicans have the lowest grade and don’t have the tools to improve.”

Financial technology has exploded in Mexico and Latin America in the past two years, driven by startups and businessman, in part because founders like Chávez, whose background is in consumer finance, think there should be an easy way to help people get money without paying 100% annual percentage on credit cards and personal expenses. To put that in perspective, a average APR in the US is about 19%.

So seven years ago, Chávez started building the free super app Zenfi, a financial health platform he described as “if Credit Karma, SoFi, Marcus and Copilot Money, ours.”

A top part of the situation is what he called the lowest interest rate in Mexico, an average of 19% APR. Zenfi also offers free credit checking and integration with open accounts. It also integrates with the country’s tax system so users can access tax information and filing tools.

One of the new features is a personal finance manager. Application users answer a series of questions, enter their financial information and receive personal financial plans for the long term, Chávez said.

Seven years after the creation of Zenfi, the company has more than 3 million users, many of whom use the platform to consolidate and pay their debts from another bank, he added. More than $100 million was distributed in loans, with a 3.4% default and $10 million in recurring annual income from interest, small fees associated with credit checks and commissions from investment products.

Not only has the company been able to show profits with this business model, but it has also achieved its first revenue of less than $3 million.

Achieving profitability is how Chávez said the company can make a new round of financing, this time with $8.5 million in new capital led by Magma Partners. Cometa, Redwood Ventures, Polígono, Conny & Co. and the AngelList syndicate led by Peter Livingston also participated.

Chávez hopes to inject new capital into several areas in the pipeline, including consumer credit and credit products. He is also looking at three countries in Latin America where he feels Zenfi’s business model will work well. In addition, Chávez will hire more people to add to Zenfi’s 60-person team.

“Currently, we have the largest loan license and personal loan company in Mexico and it is an example for the size and quality of the portfolio,” he added. “We are trying to make an impact in the Mexican financial system and want to go from $100 million in loans to $2 billion, so we will build capacity in the team and develop .”

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