Tag: lending startups

Greatest Hits Episode: Rebecca Fischer, Divibank: Helping Brazilian entrepreneurs scale with non-dilutive capital, Ep 205

Rebecca Fischer Crossing Borders

You can now find the full show notes of the Crossing Borders podcast on LatamList.com’s new podcast section. I’ll still post the audio of the podcast on my blog and I’m planning to start writing more again on my blog, like I used to.

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Thanks for listening to Crossing Borders all these years! If you have any feedback or questions, please feel free to reach out here, or contact me on social media.

Outline of this episode

  • [01:10] – About Divibank
  • [01:42] – What financing looks like for SMEs in Brazil
  • [03:40] – Divibank’s average client
  • [05:10] – Rebecca’s background
  • [06:00] – Lessons learned from working in advertising agencies
  • [08:08] – ABC of non-dilutive financing 
  • [11:30] – Divibank’s zero to one
  • [12:58] – Divibank’s first steps
  • [14:43] – Divibank’s experience with fundraising
  • [16:30] – Where is Divibank today
  • [17:49] – Rebecca’s book recommendations
  • [19:21] – Rebecca’s advice to a younger self
  • [20:10] – What’s next for Divibank

Show notes on Latamlist.com

Fixing Latin America’s Broken Lending Industry

Credit in Latin America is notoriously hard to access. Just a few years ago, credit card rates in Brazil hit 450%, which has gone down to a still astounding 250% per year. In Chile, I’ve seen credit cards that charge 60-100% yearly interest. And that’s if you can even get a card in the first place. Yet people still use these predatory systems. Why? There are rarely any other options.

In the US, access to loans depends mainly on a single number: your FICO score. Your credit score is an aggregate of your spending and borrowing history, so it gives lenders a way to find out if you are a trustworthy customer. In general, the higher your score, the bigger (or more lenient) your line of credit. You can boost your score by managing credit wisely for long periods, such as always paying off a credit card on time, or lower your score by taking on more credit, not paying it off on time or carrying a high balance. While many people criticize the FICO score model, it is a relatively simple way for lenders to verify the creditworthiness of potential customers.

Consumers in the US have access to deep pools of capital at their fingertips. Home loans, credit cards, consumer credit and other forms of debt are readily available. Perhaps they are even too available, as we saw in the 2008 financial crisis or as we might be seeing now with bubbles in student loan debt.