

Saida (YC S15) Wants to Bring Short-Term Loans to People in Emerging Markets - Bob_Rob
http://techcrunch.com/2015/07/31/saida-tktk/

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GFischer
That's a very nifty alternative/hack to expensive and sometimes inaccurate or
nonexistant credit reports :)

Especially in the third world, there's a LOT of people that don't have credit
cards, and lots of informal credit with outrageous interest rates and the good
ol' mafia-style debt collectors.

PD: I've worked for the biggest credit report company in Latin America, and
one thing I noticed is that low-income people generally DON'T default on their
credit, especially mothers or low-income workers.

The credit report company is a VERY big boogieman though (it wrecks a person's
life for at least 10 years if they default), maybe they see this option as
easier to default on.

~~~
kyalemwendwa
I would love to hear more about your experiences and the lessons learnt in
Latin America.

~~~
GFischer
I live in Uruguay, which is not exactly representative of all Latin America, I
worked (as a subcontractor) for the Equifax company here (Clearing de
Informes).

Not sure what you'd like to know :), something related to the article?

There has been a HUGE personal credit boom, so basically everyone has access
to credit... as long as they haven't defaulted on anything (credit or bills)
in the past 5 to 10 years. The Equifax branch tries to be fair in my
experience, but if it's a valid default it will make your life quite
difficult.

Also, the interest rates for personal lines of credit in local currency are
ridiculously high (there's a big currency risk they're hedging against
though), and it's not wise for either part to loan in US dollars (the lender
risks default and the person taking the loan risks not being able to pay it
and being entered in the credit report).

Argentina and Brazil are different beasts altogether.

Also, whenever the company I work (an insurance company) for launched a new
product, most of the first people to try to get accepted were extremely bad
risks (fortunately the vetoing process worked decently well).

The rural scenario described in the article is interesting but I'm not sure if
it applies, there are very few small-owner farms around, most of it are huge
landowners.

There must be some opportunities but I'm not in touch with the most
impoverished sectors of my society to tell you which they could be.

The product in the article sounds like it would work pretty well in Perú,
Bolivia and Brazil, and maybe the most remote parts of Chile and Argentina.

