Digital Banking: Nubank Strengthens Presence in Mexico with Launch of Personal Loans

Nu Mexico announces the launch of its new product: personal loans.

Like all Nu products, the launch will follow “a phased rollout process, starting in the coming days with a group of employees who will begin testing the product, to then expand the offering to the general market.”

Iván Canales, General Manager of Nu Mexico, said:

“At Nu, we are creating a complete services platform that can accompany different stages of people’s financial lives. By expanding our portfolio to personal loans, we are providing Mexicans with more options to achieve their goals. We’ve created a product that offers security and autonomy, in the Nu way: simple, transparent, and fair. We give the customer full control over their loan, with no hidden fees or conditions. This is how we want to grow our offering in the country; by empowering people to take control of their money.”

According to a survey conducted by Kantar in 2022 “for International Personal Finance (IPF), 6 out of every 10 Mexicans had applied for a loan, but according to the 2021 National Financial Inclusion Survey (ENIF), only 33% were able to obtain one from a formal financial institution.”

Canales adds:

“We aim to promote access to financial products and credit while also promoting financial education among our customers. We are having a positive impact by enabling greater access among Mexicans, as around 20% of the smartphone-connected adult population in the country has already applied to build a financial relationship with us. We hope to continue expanding our footprint in the country with the launch of personal loans.”

After the rollout, Mexicans will be able “to access simple, transparent, and flexible loans through the Nu app.”

The application process will be completely digital and “can be completed in less than 5 minutes.”

Customers will receive “a maximum offer and can adjust the amount and payment schedule to meet their needs, with a complete simulation.” Additionally, users will be able “to make early payments at any time, without additional fees or penalties of any kind.”

Nu’s consolidation in the Mexican market

With personal loans, Nu Mexico is strengthening its presence “in the country and its multi-product platform.” This announcement comes shortly “after the successful launch of the savings product Cuenta Nu, which, within less than a month of its public launch in May 2023, reached over one million customers.”

Nu is Mexico’s largest SOFIPO (Popular Financial Institution, in Spanish), and “in less than a year has evolved its offering from only credit cards to also savings accounts, debit cards, and now personal loans.”

In late 2022, Nu announced “a capitalization of $330 million, bringing its investment in Mexico for 2022 to $1.3 billion.”

With this investment, Nubank, the parent company of Nu Mexico which recently reached 85 million customers in the Latin America, “became one of the largest foreign investors in Mexico, and Nu Mexico, one of the best-capitalized financial institutions in the country.”

By the end of June 2023, Nu’s capitalization level “was over 500%, four times higher the minimum regulatory requirement for SOFIPOs (131%).”

With an approximate calculation of the capitalization indicator (ICAP), if Nu were regulated as a traditional bank, it “would have an ICAP of 42.5%.” This is twice “the average of the Mexican banking sector (19%) and four times the regulatory requirement for the banking sector (ICAP) (10.5%).”

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