After spending four years in London (United Kingdom), in constant contact with start-ups and financial technology companies (fintechs), Nicolás Arrellaga observed an important difference between the entrepreneurial scenarios in Europe and Latin America: while most European countries offer assistance and plans to incentivize the creation of new businesses, the reality was very different on the South American continent.
"Although profits are generated in the region, it lags far behind in managing documents and access to financing," says Arrellaga. So this young Paraguayan decided to create Nexoos, a collective financing platform that allows small and medium enterprise owners to access loans from investors. The service helps to eliminate the barriers which an entrepreneur must overcome in order to gain financial buy-in from banks for their ventures. Thanks to his idea, Arrellaga has been recognized as one of MIT Technology Review, Spanish Edition´s Innovators Under 35 Paraguay and Bolivia 2016.
"Nexoos not only targets financing for the company," Arrellaga explains, but also provides a "formalization channel" to support the process. In his opinion, the emerging SMEs are incapable of satisfying their needs through the banking options currently available and the informal market which is generated around them. His platform aims to help them to become "tangible and active actors in the economy."
Nexoos connects companies in need of financing with investors who provide funds in the form of a loan, and allows them to obtain larger returns more quickly and easily as compared to other investment processes. The investors need only register for an account and choose an investment project. Then they can access the offers from registered companies, including the target funding total and the interest rates and repayment term.
When a company obtains the required loan, or loans, to reach their financing target, Nexoos generates the corresponding credit agreements as well as a promissory note, in order to promote security and transparency for investors.
The director of HAG Consulting and regional director of Startup Grind in Brazil as well as a jury member for the Innovators Under 35 Paraguay and Bolivia 2016 awards, Rodrigo de Alvarenga, says Arrellaga´s platform represents "a disruption of the fintech scene by virtue of bridging the gap between private lenders and beneficiaries." The expert highlights that "although there are similar platforms in many other countries, the successful implementation of this platform in South America represents an enormous achievement."
Nexoos is already up and running in Brazil and Paraguay, and its creator has plans to expand to countries like Uruguay, Colombia and Mexico in his quest to become the leading financing platform in Latin America. According to Arrellaga, "in order to generate an important socioeconomic impact in South America you have to innovate, especially in the financial sector."
Discover all of the winning projects from Innovadores menores de 35 Paraguay y Bolivia 2016.