Black Thread
Fintech in Mexico - AI/ML for credit risk assessment to increase financial inclusion.
Introduction
Introducing Black Thread, where tradition meets innovation. The expression "descubrir el hilo negro" signifies that the obvious has already been discovered. At Black Thread, we interpret the phrase as meaning the best ideas seem obvious in hindsight. Our mission is to establish a leading Fintech company in Mexico, with a keen focus on the consumer credit market, including credit cards and personal loans. We are committed to pioneering groundbreaking technological solutions that will redefine credit risk assessment, leveraging the power of AI/ML and financial education.
Join us on this journey as we venture into uncharted territories, reimagine the familiar, and forge new paths to success in the ever-evolving realm of financial technology. Welcome to a venture where we don't reinvent the wheel – we thread it with purpose.
Problem
Among countries with a similar GDP per capita, Mexico stands out as the most challenged nation when it comes to financial inclusion. Amidst the surge of fintech companies in Mexico, obtaining accurate figures regarding the number of Mexicans with credit cards remains elusive. However, even the most optimistic estimates suggest that only a maximum of 31 million out of the country's 126 million population possess one. This leaves the majority of Mexicans in a frustrating catch-22 situation where they struggle to access credit due to the absence of a credit history.
Most individuals with modest means resort to acquiring department store or retail credit cards as a means to establish their credit history, often at the expense of facing predatory interest rates. Unfortunately, this approach does little to fuel economic growth, as people lack convenient access to credit for expanding their businesses, funding education, or covering medical expenses. The larger banks, meanwhile, tend to concentrate their efforts on developing more products tailored to a select, affluent segment of the economy. Even within this segment, the average APR hovers between a substantial 70-90%.
This stark disparity in financial inclusion and access to affordable credit underscores the pressing need for transformative changes in Mexico's financial landscape.
Opportunity
One of the co-founders of Black Thread, Diego Martinez, brings a wealth of experience from his family's longstanding business in Mexico. For the past 25 years, his family's company has been extending credit through outbound telemarketing, successfully allocating over 350 million USD in credit over the past 5 years alone for some of the country's largest traditional banking institutions.
Based on a comprehensive analysis of meticulously compiled evidence, we are confident in our ability to leverage the power of AI Language Models (LLMs) to assess transcripts of sales calls to effectively evaluate the risk of potential credit default for new customers. Our primary objective is not only to enhance the evaluation of credit default risk but, even more importantly, to assess the creditworthiness of potential clients who lack any prior credit history.
Our ultimate goal is to harness these groundbreaking risk models to address the needs of the vast majority of the country's population that is currently underserved. We are dedicated to achieving this while offering ethical Annual Percentage Rates (APRs) that empower individuals to thrive rather than becoming burdened by debt. It's important to note that we already have a substantial customer base; our focus now is on developing the necessary products and ecosystem to meet their unique needs and provide them with the financial solutions they truly deserve.