IDB Invest is considering an up to US$30 million (equivalent in Brazilian Reais) loan for Creditas, a leading digital lending platform focused on secured loans in Brazil. Creditas is able to offer loans at affordable rates by using (i) technology and data analytics to increase efficiency in both distribution and operational efforts, (ii) collateralization of loans with real estate, automobiles, and payroll, (iii) multiple sources of funding that reduce financial cost and dependency on individual investors. Creditas transfers this increased efficiency to the borrower as a product with lower interest rate, longer maturity, and larger ticket sizes. The proposed use of proceeds of the loan is to fund loans to MSMEs and vulnerable population affected by the COVID-19 crisis in Brazil.
Despite Covid-19, Creditas has proved digital origination of complex secured loans is part of the solution and essential to ensure liquidity to people and companies in need.