Our first excursion to a local start up was to São Palo based FinTech "Creditas". A FinTech is a type of company that is popular in Brazil and was created out of the need for citizens to take out loans with "reasonable" interests rates. "Reasonable" is in quotation marks because Creditas offers loans, using homes or automobiles as collateral, at interest rates of about 18% per year. As American's this seems like an absurd rate but in Brazil it is relatively cheap. Depending on the type of loan the individual is applying for, yearly rates can reach 400%.
Creditas is able to offer these types of loan prices because it uses cars and homes as collateral which is something that larger banks refuse to do because they enjoy high risk loans some people still take out. Further, Creditas is smaller and more versatile than the large outdated banking systems and has an easy to use app, easy application process, and creates a more personal relationship to its coustomers. The combination of these business traits allows Creditas to thrive in a market that desperately needed competition.
On a more personal level, Creditas consisted of 400 employees spanning over two floors of industrial complex that seemed to have a very young average age. In the past year, Creditas has quadrupled in employees and has expanded from one unit in the industrial complex to two entire floors. After our tour, a data analyst mentioned that he is a senior member of the company after only being at the start up for a little over a year because seventy five percent of the employees did not work at Creditas the same time last year. The same analyst claimed that the company was growing at an impressive rate and it was really exciting to be apart of a firm that is growing so rapidly.
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