P2P-Banking.com’s Claus Lehmann posted a comprehensive interview this morning with Alejandro Cosentino, the CEO of Afluenta. Afluenta, a leading marketplace lending company in Latin America (LatAm) that connects creditworthy borrowers with investors, to create more convenient loans and better investment opportunities, provides an innovative investment alternative for individuals and institutions lenders interested in getting better yields through investing in consumer loans without the traditional middleman.
Launched in 2010, Afluenta has been built on Cosentino’s experience in financial services obtained running American Express in LatAm and Santander in Argentina, and his work in the Latin American tech industry and initially with his own savings. After two fund raising rounds, Angel one and Series A (both of them Argentinean investors), the platform is set to close its Series B with US VCs and international institutional investors to support the regional expansion process. The Argentinean National Securities Commission approved the launch in September 2012.
Focusing on Argentinean and Peruvian markets, Afluenta plans to launch in other selected emerging markets such as Mexico, Colombia, Brazil, Chile and Uruguay.
“We set the rules for this industry in Latin American region. We operate as Lending Club or Prosper do their business in US. Afluenta is the first authorized P2P marketplace in the region. We solved the regulatory and tax issues initially in Argentina and then in Peru using current legislation allowing us to run a marketplace lender without asking for new laws or changing current regulations,” commented Cosentino. “On the other side, our technology is world class and Afluenta developed innovative features for lenders to operate simple, faster and profitable such as secondary market, automate investing, CRM of collections among other and add 100% transparency of all the data in the investment platform.”
Cosentino notes that “the net yield that investors can expect is, swapped in US dollars, an average of 21.5%. The loans are provided in local currency and always will be in local currencies no matter the country we will be operating in.”
Lehmann also asked Cosentino about the economic and regulatory environment in Argentina:
“There is no specific P2P or Marketplace regulation in any country in Latin America. Afluenta is an investment system that works through a trust governed by specific local law, where investors act as trustors and Afluenta acts as trustee. Loans are granted through a trust with contributions made by investors in accordance with their instructions. Afluenta is registered with the National Securities Commission to provide public fiduciary services, while being monitored by the National Securities Commission, an entity which neither authorizes nor monitors any fiduciary agreement executed by the trustee,” continued Cosentino.
“Afluenta does not do financial intermediation, because it is not receiving deposits from people and undertaking the risk of giving them back while undertaking the risk of default of loans using those funds. Afluenta neither intermediates nor faces such risks as banks do because it is neither the depository nor the sole owner of the funds: trustors are investors (neither depositories nor creditors) who invest their money by stating the amount, destination and opportunity of the funds and understand the risk they undertake when they expect to receive profit as a result of the activity.”
The platform sees itself as a truly new alternative with a potential high net yield and low volatility providing investors better yields compared with traditional banking products, simplicity and liquidity. For borrowers, Afluenta offers access to cheaper loans than traditional financial institutions, quicker received loans faster and a “hassle-free process” that is 100% online.
When asked what’s in store for Afluenta’s future, Cosentino predicted Afluenta to be the “leading P2P regional company in Latin America operating in 7 key markets, offering the most convenient way to apply for a loan and a smart way to invest your funds across different assets (consumers and SMEs) and with several partnership with banks and large institutional lenders.” To read more about Cosentino’s insight on the role of inflation, latin american P2P lending verse its US and UK peers, foreign investments and alternative finance, click here for the full interview.