The minimum wage in Mexico is 88 pesos (about $4.70) a day. At that salary, savings don’t last very long.
For millions of minimum-wage workers in Mexico, an unexpected emergency room visit or celebration means going to the most reliable and available source of fast cash: payday lenders.
For years, these payday lenders have had a stranglehold on the small loans market in Mexico, charging interest rates that can quickly climb up to 425%. But technology is beginning to change that.
A shield for life’s emergencies
ePesos is part of a crop of new mobile payment companies that are bringing reasonable microlending options to the market.
ePesos lets customers advance money from their next paycheck on their phones, instantly. Their technology – “little bits of code” – also allows them to bypass the paper-heavy system of traditional banking in Mexico.
Their big idea is simple but revolutionary: work with employers to pull loans directly out of employees’ paychecks. This has two benefits: it helps customers keep better track of their borrowing, and it prevents the borrowing from getting out of hand, by limiting loans to one-third of a paycheck.
“It’s an extra shield of protection for life’s emergencies,” said ePesos Director of Strategic Partnerships Alex Martin. “Maybe your mom is sick or your kid tore his uniform on the soccer field – but you don’t get paid again until next week. We help you pull a few hundred pesos out of next week’s paycheck.”
From Village Capital to Series A
Oscar graduated from Village Capital’s 2016 Fintech Mexico investment-readiness program, where he and the ePesos leadership team met one-on-one with investors and other mentors who offered him advice on things like product-market fit – including PayPal senior leaders.
One of these meetings was with leaders from Gentera, one of the largest financial institutions in Latin America. Several months after the program, Gentera ended up licensing the ePesos technology and participating in their Series A financing – a six million dollar round in October 2017 led by strategic investor Santander InnoVentures that is still one of the largest-ever startup equity raises in Mexico’s history.
ePesos has grown to 27 people since 2016, nearly doubling since Oscar went through the program. They’re expanding to new products to help people and small businesses get quick and affordable loans when they need them.