AUGUSTO ÁLVAREZ AND JOSÉ LUIS OROZCO
One of the fastest growing fintechs in Latin America today, AlphaCredit will continue to focus on using technology to increase financial inclusion in the region.


What opportunities did you identify in the market that motivated you to establish AlphaCredit?
AUGUSTO ÁLVAREZ There were many opportunities to take advantage because Mexico and Colombia have high levels of financial exclusion. What we wanted to do was focus on the fintech credit segment and the creation of credit opportunities. This is a huge opportunity we continue to see even 10 years later. When you look at credit penetration in the private sector as a percentage of GDP in both Mexico and Colombia, it is low compared to peer countries such as Brazil, Chile, and Peru. We saw a huge opportunity to use technology to increase financial inclusion through loans in Latin America.
What kind of strategies did AlphaCredit use to become one of the fastest growing fintechs in Latin America today?
JOSÉ LUIS OROZCO We are good at upscaling. There are things we think we do well, such as looking to the future and establishing the capabilities we will need in two years. Obviously, that is easier said than done and you need a company geared toward operating with constant change. Anyone who works at AlphaCredit will tell you that our constant is that we change everything. Adaptability is a key requirement for scaling up. This means your technology needs to adapt quickly and be set up in a way that allows for upscaling. Likewise, the talent, which is the most important thing, has to be adaptable and scalable.
What do you think of the profile of investors you have right now?
AÁ We have been fortunate to have great institutional investors since the beginning on both the equity and debt sides. AlphaCredit has lenders from international private and public markets. We issued debt on the Singapore Stock Exchange in 2017 and locally on the Mexican Stock Exchange. We have worked with pension funds from all over the world and many institutional investors that TBY covers in its publications. You need to set up your company with the right processes in order to attract such investors.
What does Mexico need to become a cashless country?
JLO From a technological point of view, we first need to make electronic transactions frictionless. Mexico also needs to work on adapting its legal system, so people are able to resolve disputes in the electronic and cashless economy. If people have an issue with a banking app, there is no efficient way of resolving that dispute with their bank, which means they are unlikely to use that app again and will go back to cash. There are positive things being done in Mexico to move people toward a cashless economy.
How far away is Mexico from digital wallets being the norm?
AÁ We are not that far away. I have been impressed by the number of small businesses, such as taco stands, that accept payments through Clip and Square. I am optimistic that this technology is what people will eventually adopt. There is certainly a generational gap, but people are catching up fast. Telecom, cellular, and 5G infrastructure in Mexico is not great, but it is much better in terms of coverage when you compare it to other countries, especially the US.
What are your main goals at AlphaCredit for 2020? Do you have international expansion plans?
JLO One of our main goals in 2020 is to continue our financial inclusion mission by targeting the independent contractor sector. This sector is growing in Mexico and Colombia; therefore, we have launched a product called AXS (Access) geared toward independent contractors who work in electronic platforms. We will continue to expand our penetration through those platforms in 2020. In general, we will continue to grow all of our other businesses, including the SME sector, which has the same dynamics.

TABLE OF CONTENTS
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