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INSIKT Offers Loans to Underbanked American Families

INSIKTINSIKT, a company that lends money to underbanked families in the U.S., has raised an additional $50 million in a Series D funding round led by Mexican department food chain Grupo Coppel.

A press release on the funding series said Grupo Coppel, has had “years of experience of giving credit and empowering financial services” to millions of formerly unbanked families in Mexico and Latin America.

(Read: Why a Mexican Department Store Chain Is Investing in a U.S. Fintech)

First Mark Capital, Revolution Ventures, and Colchis Capital – existing investors of INSIKT – also participated in the fundraiser.

With the money that was raised, INSIKT’s funds now total $100 million.

Better Ways of Evaluation Families With Low or No Credit Scores

TechCrunch said many lenders deem families with no or low credit scores as “too risky,” but INSIKT believes that there are other ways of evaluating them.

(Read: 45 Million Americans Have No Credit Score)

A study by the Consumer Financial Protection Bureau showed that 26 million American adults have no histories with national credit reporting agencies while 19 million have “limited or out of date” credit reports that they are “unscorable.”

TechCrunch said INSIKT came up with a better alternative to payday loans by breaking up payments into smaller installments.

INSIKT’s loan processing service is used in more than 600 banks and credit union locations in California, Texas, Illinois and Arizona.

Change the Landscape for Underbanked Families

INSIKT chief executive James Gutierrez said: “We want to change the landscape for underbanked people and help them improve their lives.”

Gutierrez pointed out that “a lot of companies out there who want to offer that product but they don’t know how to underwrite.”

INSIKT said an average borrower in the U.S. earns $28,000 yearly but instead of looking at that person’s income, the company looks at his or her payment history.

If the borrower had been consistent in past payments, then he or she is considered reliable.

What’s Next?

White label lending company INSIKT has raised additional funds to give out as loans to underbanked families.

What are your thoughts on this? Share them by commenting below.

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