High Delinquencies Spell Trouble for Brazil’s Fintechs
- Open Co hit by losses on riskiest securitized loan tranche
- Defaults rise to 9.5% in credit market used widely by fintechs
Brazilian fintechs are getting hit by a wave of defaults on loans they made to customers that the nation’s bigger, legacy banks wouldn’t touch, causing risky layers of an asset-backed credit market to collapse.
The companies, which include Goldman Sachs-backed Open Co and Nexoos, are seeing delinquencies on some of their portfolios for unsecured loans rise to as much as 60%, forcing them to merge, pull back on expansion plans and sell assets to survive.