There are about 40 million Mexicans who are excluded from certain financial products because banks don’t think it’s a worthwhile segment, but Filiberto Castro does.
The former bank executive worked at banks including Citi and Scotiabank for nearly a decade before moving into the fintech space to become head of growth at Konfio. There, 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 co-founded Garcia Aviva with Israel, a Mexico-based fintech startup focused on bringing working capital to underserved communities.
Aviva’s approach uses artificial intelligence and natural language processing to match the spoken word of customers with the fields of a real-time credit application. Within minutes, clients can qualify for a nano business or home improvement loan of up to $1,000.
Unlike other fintechs that focus on large, urban areas, Aviva focuses on smaller communities where the company can address lack of trust in banks, predatory interest rates and help users who may not have the technical prowess, such as a smartphone , to make purchases of financial products directly.
Now backed 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 customer’s risk and willingness to pay to secure the loans.
“No one has done anything for this segment in the last 25 years,” Castro told ExamPaper. “A lot has been done in the big cities, but by creating deep tech, AI and the video calls, we can create elements to explore credit and lower interest rates. This has the potential to create a new middle class in Mexico and later all of Latin America.”
The company makes money financing the interest on the loans, but can charge less than current banks. Average interest rates in Mexico could be in the triple digits, but Aviva can charge around 80%, though still high, he added.
Aviva is still in its infancy. It launched its product in November with 10 employees and has three kiosk locations that have since seen more than 500 customers. The kiosks are located in Chalco de Díaz, Ixtapaluca and Texcoco, towns about an hour from Mexico City. The company is also seeing a lower rate of delinquent loans than originally thought, Castro said.
The pre-seed was led by Wollef Ventures, who 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 will invest in building its credit and acceptance system, preparing for the launch of the company’s own credit card and expanding its kiosks. Going forward, Castro also sees the company offering a full banking offering to its customers.
“The credit card will give us a way to make loans when customers don’t have a bank account,” he said. “That’s great for us because it shows that we’re targeting the right segment: people who don’t have a relationship with a bank.”