Appliances, cell phones, furniture, clothing, mattresses and even motorcycles are some of the products that can be purchased in installments without the need for a credit card of a bank, from the appearance of digital finance companies (fintech) that facilitate access to credit for the population without a fixed or formal income.
Although 92.5% of adults in Argentina have a bank account, only 37.5% had balances payable on a credit card in their name as of December 2021, reflecting a low intensity of use those accounts and a lack of access to more developed financial products, such as loans, insurance or investments, according to data from the Central Bank (BCRA).
The lack of credit history, jobs in a dependency relationship or the fear of incurring maintenance expenses are some of the factors that keep a large percentage of the country’s population from accessing these financial products.
That is where the consumption options offered by different non-bank credit providerswhich provide an alternative to buying items in installments that would otherwise be very difficult to pay for in a single payment.
Requirements to access a credit
– Be an Argentine citizen or resident in the country
– To be 18 years old or more
– Not have a negative history in the payment of credit products
“60% of our users do not have credit cards and 40% is the first time they make an online purchase. This responds directly to our purpose of providing financial and digital access,” Ezequiel Bucai, CEO of Wibonda company from Cordoba that offers a means of digital payment for purchases in up to 12 installments with and without interest, with an average rate of 100%, but which depends on the customer credit scoring and the trading decisions of each trade.
According to Bucai, the average ticket for purchases through the platform is about $40,000 in categories of personal care, sports, education, appliances, home, fashion and technology, among others, although “the vast majority look for technology, especially cell phones and televisions.
The business model of the company is that of “buy now and pay later“, which allows the user to create a user ID on its website (www.wibond.co), choose between products from more than 200 participating stores throughout the country and, at the end of the purchase process, select Wibond as a means of payment and, in case of paying in installments, pay the first only 30 days after the purchase.
Among the forms of financing without a card is also that of the fintech Ualá, which allows its users to access a personal loan of up to $500,000 and with repayment in 6, 12, 18 or 24 months, and a credit limit from the app. to transfer consumption to installments.
The quotation system allows up to 9 installments for consumptions already made (up to six months old), starting at $100 and with a cap ranging between $4,000 and $25,000, and having the money on the spot.
Among the requirements to access a loan are being an Argentine citizen or resident in the country, being 18 years old or older, and not having a negative history in the payment of credit products.
“The amount in personal loans is $65,000 averageand the main reasons are for purchases or spare parts, personal expenses or payment of debts.
For their part, fees are around $1,800 on average,” they explained to Télam from Ualá.
Another option to buy in installments is the fintech Ceiba Creditswhich offers loans of 24 months up to 36 months, specifically aimed at the purchase of motorcycles, household appliances and other durable goods for underbanked users.
“Between 30 or 40 percent of our clients who do not have a credit history. It is a public more likely to take this type of financing because they do not have as many alternatives. In fact, we started in 2015 lending to banked people but we realized that a sector where there is not much to do, because they already have an excess of offers from other banks. That is why in 2018 we opened up to other sectors, with financing for motorcycles and now we are adding appliances and other items such as bicycles,” said Facundo Maungeri, CEO of Ceibo credits (www.ceibocreditos.com.ar).
The different degrees of labor informality, the calculation of income levels and the lack of a credit history are the main obstacles to access for this population, which is why in recent years the use of big data and artificial intelligence to calculate the degree of uncollectibility of the credits.
“Us we have between 10 and 15 percent uncollectibility of our credits. It is risky when compared to the traditional banking system (where less than 5% of customers do not pay their credits). That is why we seek not to be an option to obtain a quick loan without a defined purpose, but rather to be used to make a consumption and establish a more direct relationship with the client,” said Maugeri.
Hence, credits of this type are always in fixed installments and in pesos, so that they are more transparent and easy to understand for a public unaccustomed to using financial services.
Another option for consumer loans is what is granted Payment Marketwhich are used to make purchases in installments without a card in Mercado Libre, to pay utility bills, recharge cell phones, as a payment option in stores with a QR code, or as personal loans to use the money for whatever you need.
“The user can choose the amount (of a pre-approved offer according to their behavior on the platform), the payment term and the conditions. On the screen prior to accepting the operation, the user is informed of the rates and how much he will pay a fee”, they pointed out from Mercado Pago.
As they explained, the majority of users who take credits from Mercado Pago do not have access to bank credit or it is the first time they use a credit and 80% of the takers request them again.
