By Charlotte Gouveia Neto
The second speaker of the trip was Guillermo Acuna, General Manager at Cumplo, a P2P lending start-up. Guillermo shared his personal story on how he decided to switch careers from working in an investment bank selling bonds, to pioneering a different type of Chilean financial business model by attempting to address inequalities in the current financial system. Guillermo first began his presentation by sharing a background on how small and medium enterprises (SME’s) typically acquire loans through banks and the lending policies and regulations currently in Chile. Apparently all that a person needs to lend another person money in Chile is a Chilean tax number (similar to a U.S. social security number) and a Chilean bank account. From there, the two parties who are entering the transaction would sign a promissory note stating the amount one is loaning the other and the other additional terms of the agreement. Therefore, due to the ease of lending policy in Chile, the opportunity for Cumplo to provide this platform seems to be a perfect niche for the lending platform presented.
Typically, banks in Chile make it very hard for normal people with start-ups and businesses without a lot of capital to get funding due to very high lending rates and expected rates of return that can typically result in 30% and more annually owed back to the investor. Guillermo stated that around 50% of SME’s (that currently aren’t using Cumplo) time is wasted on looking for sources of funding, another major problem of the current system in place. If a start-up was to use Cumplo, the SME could use the platform to significantly decrease the amount of time the business owners spend on looking for funding as well as utilizing the platform to keep information or to negotiate better future rates from investors.
Last year (since 2015), Cumplo lent over $45 million and has lent over $87 million since 2012 through over 2,740+ investors. Cumplo originally began as a consumer lending platform, however Guillermo stated that one of his company’s biggest challenges, as well as the banks and other financial institution’s problem’s in Chile is gaining access to valid information on individuals as personal financial information is only reliable from the previous day. Thus, Cumplo has shifted its focus to the previously stated SME Chilean market, with hopes to start offices with local partners in Mexico and Australia. Guillermo ended the discussion by stating Cumplo has a less than 1% default rate and the company has been so successful that when the Chilean FBI came to the corporate headquarters and found no illegal activity being performed, that one of the investigating officers came back to seek lending opportunities for himself.
Typically, banks in Chile make it very hard for normal people with start-ups and businesses without a lot of capital to get funding due to very high lending rates and expected rates of return that can typically result in 30% and more annually owed back to the investor. Guillermo stated that around 50% of SME’s (that currently aren’t using Cumplo) time is wasted on looking for sources of funding, another major problem of the current system in place. If a start-up was to use Cumplo, the SME could use the platform to significantly decrease the amount of time the business owners spend on looking for funding as well as utilizing the platform to keep information or to negotiate better future rates from investors.
Last year (since 2015), Cumplo lent over $45 million and has lent over $87 million since 2012 through over 2,740+ investors. Cumplo originally began as a consumer lending platform, however Guillermo stated that one of his company’s biggest challenges, as well as the banks and other financial institution’s problem’s in Chile is gaining access to valid information on individuals as personal financial information is only reliable from the previous day. Thus, Cumplo has shifted its focus to the previously stated SME Chilean market, with hopes to start offices with local partners in Mexico and Australia. Guillermo ended the discussion by stating Cumplo has a less than 1% default rate and the company has been so successful that when the Chilean FBI came to the corporate headquarters and found no illegal activity being performed, that one of the investigating officers came back to seek lending opportunities for himself.