Unsecured loans are the most common product offered by Brazilian financial technology companies, Valor Econômico reported, citing a report by PwC in partnership with the digital credit group ABCD.
According to the survey, 42% of credit fintech companies that cater to individuals offer unsecured loans, an instrument that has been shunned by big banks due to the economic crisis. Fintechs are able to offer more of the product because of the use of advanced tools to analyze the risk of each borrower, as opposed to traditional banking models which use borrower groups.
"With more technology, you can give more unsecured credit without posing a high risk," said Rafael Pereira, president of ABCD and personal-loan fintech Rebel.
Meanwhile, 19% of the fintechs surveyed offer direct consumer credit, which is also an unsecured product.
For fintechs that mainly serve corporates, the most common offerings are unsecured general credit with 35%, working capital with 30% and secured general credit with 30%.
Combining the two segments, 32% of the companies surveyed said they accept assets to secure operations.
Brazilian fintechs granted $1.2 billion of loans in 2019, growing 48.6% year over year.
