Doopla, an electronic platform that offers loans and direct investments, has recently become the second fintech company to be approved under the Fintech Law in Mexico. This law was created to regulate financial technology institutions and promote innovation in the industry. Doopla’s approval signifies a milestone for the company and the fintech sector in Mexico.
The Fintech Law in Mexico
The Fintech Law in Mexico aims to regulate financial technology institutions and facilitate the development of innovative products and services that benefit the public. It also seeks to promote more efficient and attractive processes within the industry. This regulatory framework provides a supportive environment for fintech companies to operate.
Approval Process for Fintech Companies
Doopla’s application for approval went through a rigorous process. An Interinstitutional Committee consisting of representatives from the CNBV, Banxico, and the Ministry of Finance reviewed and evaluated the application. Doopla’s application was submitted in September 2019, making it the first company to make such a request. After a thorough assessment, Doopla successfully obtained approval.
Unique Features of Doopla
Doopla stands out from other fintech companies in Mexico due to its unique features. The company offers low-interest rates, high yields, and operates without intermediaries. Its fully online model provides convenience and accessibility to users. To join the platform, users must fulfill certain requirements such as an initial deposit, an official photo ID, a bank account with CLABE, and signing a digital contract.
Financial Offerings and User Base
Doopla offers loans with an average interest rate of 12 percent and an average yield of 19 percent. The credit amounts range from MX$10,000 to MX$200,000. Over the span of six years, Doopla has lent close to MX$250 million and has experienced significant growth, with a 121 percent annual growth rate. It has garnered a user base of 700,000 individuals.
Challenges for Fintech Companies
Obtaining approval under the Fintech Law is beneficial for fintech companies as it provides greater security for potential investors and enhances trust among end users. However, the authorization process can be slow and complicated, especially in challenging times, such as the COVID-19 pandemic. The regulatory flexibility and addressing legal gaps, such as fiscal issues among crowdfunding companies, are ongoing challenges that need to be addressed to foster a supportive environment for new fintech companies.
Doopla’s approval under the Fintech Law in Mexico is a significant achievement for the company and the fintech sector. The regulatory framework allows for the growth and development of innovative financial products and services that benefit the public. While challenges still exist, the Fintech Law provides legitimacy and trust to fintech companies, fostering a vibrant and innovative ecosystem in Mexico.
Frequently Asked Questions
What is the Fintech Law in Mexico?
The Fintech Law in Mexico is a regulatory framework that aims to regulate financial technology institutions and promote innovation in the industry. It provides a supportive environment for fintech companies to operate and develop innovative products and services.
What sets Doopla apart from other fintech companies?
Doopla differentiates itself from other fintech companies through its low-interest rates, high yields, absence of intermediaries, and fully online model. The company offers convenience and accessibility to its users.
What challenges do fintech companies face in Mexico?
Fintech companies in Mexico face challenges such as slow and complicated approval processes, regulatory flexibility, and addressing legal gaps. These challenges need to be addressed to create a supportive environment for new fintech companies to learn, grow, and attract investment.