A new lending company from Mexico, GoCredit, launches on Mintos

We’re happy to announce a new company on Mintos that operates in the Mexican lending market – GoCredit. The company issues direct debit and payroll loans, both of which will be listed as personal loans on Mintos.

Direct debit loans are personal loans that are automatically deducted once the borrowers receive a salary or pension in their bank accounts. Payroll loans are deducted by the employer (i.e. government agency) before the borrowers receive their net income effectively removing the risk of the borrower’s willingness to pay.

GoCredit was founded in 2011 and is currently employing 200 people. Until now, the company has issued more than 26 000 payroll loans and more than 9 000 direct debit loans. As of 30 May 2021, the company’s net portfolio was worth €8.7 million. GoCredit sees a tremendous growth opportunity as there are around 9 million government employees and pensioners who may qualify for payroll and direct debit loans.

GoCredit personal loans on Mintos

Annual interest rates

Up to 9%

Average APR* 

69% for payroll loans, 129% for direct debit loans

Average loan amount

€1 400 for payroll loans, €1 000 for direct debit loans

Non-performing loans ratio (PAR 60**)

7% for payroll loans, 18% for direct debit loans

Average loan term

36 months for payroll loans, 30 months for direct debit loans

Skin in the game

10%

Mintos Risk Score

6

Buyback obligation

Yes

Interest on delayed payments

No

*Annual Percentage Rate

**Portfolio At Risk (overdue more than 60 days)

For the time being, the Mintos Risk Score for loans issued by GoCredit is 6, with the subscores of 6 for loan portfolio performance, 6 for loan servicer efficiency, 7 for buyback strength, and 6 for cooperation structure. As explained below, the score will be adjusted as soon as the Master Trust account set up for investors on Mintos is finalized.

For payroll loans, the creditworthiness is evaluated based on the payment capacity of the customer, which is confirmed by the employer – government agency. For direct debit loans, the company has developed a unique scoring model which evaluates numerous variables such as FICO Score1, Credit Bureau history and information, analysis of bank statements, location, references, and more.

GoCredit comes on Mintos with a higher level of security

The security consists of a direct loan assignment complemented by an extra layer of pledge over loans listed on Mintos, which will be established in favor of Mintos investors. Then notably, there will also be a third-party trust provider securing the cash flows, and Mintos investors will be the first beneficiaries of the repayments coming from particular loan agreements. So, for example, in the case of GoCredit default, any borrower repayments would go directly to Mintos investors, then any remaining amounts would go to the lending company itself. 

As soon as the Master Trust account for investors on Mintos is finalized, the cooperation structure subscore will be improved to 8 resulting in an overall Mintos Risk Score improvement to 7.

Federico Diaz, CEO of GoCredit: “With access to additional funding, our business is ready to grow fast. Right now, it's a heavy scaling period and we aim to reach $50 million in assets under management in the next few years. Our company is based on transparency and we want to set the same relationship with Mintos investors. We also have a lot of agencies that monitor our processes and have established a third-party supervised Trust, so the investors can be assured the cash flow will go to them as a priority”.

How to invest in GoCredit personal loans

Mintos has added GoCredit personal loans to the Diversified strategy. If you want to invest in these loans with a custom automated strategy, make sure to adjust your strategy settings. If you’re investing manually, you can filter the loans on the Primary Market.

About GoCredit

GoCredit is a Mexican lending company, founded in 2011. The company issues direct debit and payroll loans, both of which will be listed as personal loans on Mintos.

Direct debit loans are personal loans that are automatically deducted once the borrowers receive a salary or pension in their bank accounts. Payroll loans are deducted by the employer (i.e. government agency) before the borrowers receive their net income effectively removing the risk of the borrower’s willingness to pay.

GoCredit sees a tremendous growth opportunity as there are around 9 million government employees and pensioners who may qualify for payroll loans.

Footnotes:
*To read more about the FICO score in Mexico, please visit: https://www.fico.com/

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