MUTUO is a credit platform that creates structured financial products for the supply chain, boostng their asset allocaton and credit worthiness score with artificial intelligence. MUTUO’s platform allows suppliers to finance their MSME clients using asset leasing, factoring, reverse factoring, working capital, online unsecured credit, financing the conversion from diesel and gasoline vehicles to natural gas, and investment vehicles for funders in Latin America.
MSMEs: MSMEs need an asset from a supplier that they cannot afford, and fill out an online credit application on MUTUO’s website that requires personal information (e.g., proof of residence, tax information, bank account, photo ID). MUTUO supports MSMEs in getting this information as needed. MUTUO verifies the application. If MUTUO approves, an asset is leased to the MSME within 48 hours following submission. Assets range from 1-24 months with monthly interest rates beginning at 1.5% on a monthly basis. MUTUO also collects payment history on the MSME over time and if the MSME meets payment requirements, MUTUO offers the MSME other products by using the asset previously purchased as a micro collateral.
Mexico had approximately 4M SMEs in 2016, which accounts for 99.7% of all private sector enterprises, 62.6% of private sector employment, 35.2% of GDP. Mexico has the lowest productivity level of SMEs within the OECD. Increasing growth and survival levels in SMEs holds the solution to increase productivity. Access to finance and insufficient income liquidity (cash-flow) are the top issues for SMEs in Mexico noted as their main obstacle for growth and survival. 53% of SMEs in Mexico have insufficient access to financial services and accounts for a $60B credit gap. In 2014, about 16.5% of SMEs had access to some type of financing, of which only 7.1% of SMEs had access to a bank loan and the rest had to rely on sources including family loans, suppliers, government, partners, and other sources. Although bank credit has grown at an average annual rate of 12% over 2009-2014, loans to SMEs continue to be 7-8X more expensive in Mexico than in the U.S. with an average interest rate of 10-11%.8 9 SMEs are the main financing source (85.5%) for large corporates extending payment terms up to 180 days, facing challenges to optimize payment collection and management, liquidity issues, and need support to handle volatility in their accounts payables and accounts receivables.
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