Fostering Women entrepreneurs and group lending

Grupago Secures $4.3M Seed Funding to Transform SMB Credit Landscape in Latin America with AI and Community-Driven Solutions

Grupago, a fintech startup focused on providing digital microcredit to small and medium-sized businesses (SMBs) in Latin America, announced a $4.3 million seed funding round led by Deciens Capital, with participation from Precursor Ventures, Clocktower Ventures, Twine Ventures, and various super-angels from the United States and Mexico. Launched in October 2023, Grupago aims to address the substantial credit needs of Latin America’s SMB sector, which constitutes 90% of businesses and generates nearly a third of the region’s GDP, yet faces an estimated 87% unmet credit demand. This issue is particularly acute for informal micro-businesses, which have been largely underserved by both traditional and fintech lenders due to challenges in outreach, underwriting, and collections.

At the moment, these are the group requirements:

• The group must be of 5 members
• All members must be women
• All members must know each other and live in the same city

Grupago overcomes these challenges through a unique blend of AI-driven underwriting, group collateral, and community distribution. By leveraging artificial intelligence and non-traditional data sources, the company can underwrite small loans and expand credit limits based on repayment history. The group collateral model encourages lending groups to co-sign for each other’s loans, enhancing loan security and underwriting data. Additionally, Grupago employs a novel community distribution strategy, where community leaders help build lending groups in their locales, enabling the company to reach underserved markets efficiently.

Currently active in Mexico, Grupago has plans to expand its services across Latin America, with a particular focus on women entrepreneurs. The company’s approach, inspired by the group lending techniques developed by Nobel Prize winner Muhammad Yunus, aims to provide micro-SMBs with accessible, low-cost capital in a fully digital format. Grupago’s efforts are not only about expanding financial access but also about supporting the financial infrastructure and offerings renaissance in Latin America.

Grupago’s initiatives and vision have received support and praise from its investors, including Deciens Capital, which values the company’s commitment to serving underserved communities and its innovative, collaborative approach to problem-solving. With its headquarters in Mexico City, Grupago stands as a pioneering force in digital microcredit for Latin America’s SMB sector, promising to facilitate the growth and success of micro-entrepreneurs across the region.