Mexican fintech Konfio upsized its outstanding borrowing line with US firms Goldman Sachs and Gramercy to a combined $227 million to increase SME lending in the region.
The fintech, which helps small businesses access loans, announced it had extended the financing by two more years and increased its size to 4.1 billion Mexican pesos, or $227 million. The number is up 13.8% from a previous commitment of 3.6 billion pesos, or almost $200 million.
“We are very pleased to announce this credit line extension, as it shows the continued confidence in the Mexican SME segment and Konfío’s lending business,” said David Arana, CEO of Konfio, in a statement. “(It) helps us continue with our mission to promote growth and productivity among SMEs in Mexico.”
The startup will apply the new capabilities to increase lending, even as the risk of a US recession looms in North America. The fintech said the additional funds would result in 10 thousand new loans, typically ranging from $8,000 to $165,000.
SME lending is one of the key products within Konfio’s ecosystem for small businesses. It also includes business credit cards and point-of-sale devices.
Lack of financing has long been an issue for Latin American smaller-sized companies. The fintech claims it leverages data technology to expedite loan applications and lends to customers “historically neglected” by traditional banks.
VC funds backing Konfio
Several venture capital investors back Konfio. These include QED, Kaszek Ventures, and SoftBank Innovation Fund.
For the US investment bank, the fintech is not the first of its kind in its Latin American portfolio. Last year, Goldman approved a $140 million line to Xepelin, another fintech lender in Mexico. Also, in 2022, it provided $150 million to Clara.
Konfio said it would combine the Goldman credit line with a second facility from Gramercy.
“The combination of the Gramercy credit line with the Goldman Sachs extended credit line allows us to more efficiently deploy Konfío’s capital in favor of SMEs,” Jeffrey Sadowsky, Konfío’s Vice President of Treasury and Capital Markets, said. “We look forward to continuing to build on the favorable experience of having these two institutions working in sync to support our mission.”
Mexico overall has become a hotbed of fintech activity. According to the Inter-American Development Bank, it is the second-largest ecosystem in the region. It had 512 financial technology companies as of 2021.
