Mercado Libre Inc., the Argentine online marketplace, plans to offer loans for working capital to entrepreneurs in Mexico and Brazil in later part of the current year, extending on a program the firm rolled out in its homeland last month.
Vendors using Mercado Pago payment platform and Mercado Libre will be entitled for loans as good as 2 months of their monthly trades, claimed Head Of company’s Mexico operation, Ignacio Caride, in an interview to the media.
Growth in big-data study is helping Mercado Libre control data gathered regarding its clients and their business over 18 years in Latin America.
“We are aware what they trade, how they resolve conflicts, how they have developed their sales in past few years, how they take care of their users,” Caride claimed. “No bank has that type of quality.”
Since the company is utilizing its own money, Caride claimed that it did not want government permission to subject the loans. He refuses to say the amount of interest Mercado Libre might take.
Mercado Libre, which means “Free Market” in Spanish, is top online retailer in Latin America and gave net income of $274 Million in the quarter one, a rise of some 74% percent as compared with the same period last year.
Small businesses and low-income families in Latin America frequently struggle to win approval for bank loans and have no or poor credit histories.
Vendors will not be needed to submit financial documents and sign documents to Mercado Libre for receiving “Mercado Credito” loans, Caride claimed.
Mercado Libre itself endorses the loans to customers with significant sales and proven cash flow, data it collects from an algorithm the company has designed employing big data.
The company rolled out same lending last month in Argentina.
Mexico and Brazil contributed for almost 60% of revenues of the Mercado Libre in 2016.
Boosted by its profit growth and robust sales, stock of Mercado Libre has up surged 77% so far in 2017 and lately hit high record.
“We think that Mercado Credito might make Mercado Libre 100 x bigger than it currently is,” Caride claimed.