Banco Sabadell, Telefónica unveil Mexico consumer lending pilot

Banco Sabadell México and Telefónica Movistar are launching a pilot program in Mexico to issue consumer loans of up to 45,000 pesos (US$2,290) to pre-paid and pay-as-you go wireless clients.

With the pilot, the firms are blazing a trail with the bank/carrier partnership model in Latin America - a scheme already making waves in Europe and the US.

“This is the first collaboration between a banking institution and a telecommunications company in Mexico,” Sabadell said in a press release. 

The service, called Movistar Money, is based on an eponymous lending platform the partners created in Spain, the corporate home of both Sabadell and Telefónica, which lends up to 4,000 euros (US$4,850) to clients.

Approved loan recipients with the Spanish service receive the funds within 24 to 48 hours with terms to fulfill obligations over 24 or 36 monthly payments.

In addition to Movistar Money in Spain, US carrier T-Mobile has been rolling out banking services in the form of T-Mobile MONEY.

A similar program is also underway with BBVA and Telefónica in Colombia. 

Movistar Money arrives as Sabadell’s involvement in Mexico is somewhat uncertain amid heavy speculation that the parent company might be acquired by one of fellow Spanish lenders BBVA and Santander - a transaction JP Morgan said last week was one of the more likely to emerge from the M&A consolidation now taking place in Spain’s financial sector. 

Telefónica Movistar serves an estimated 23.6mn prepaid customers in Mexico and 2.6mn pay-as-you-go clients, and while only a limited group will participate in the pilot program, Sabadell said it plans to widen the pool to the entire client base if the pilot goes well.

Movistar Money’s algorithms will determine credit availability based on customer loyalty, timeliness and regularity of payments, and in pre-paid clients, the type of plan contracted.

“2020 has left us with greater digital adoption, which is a unique opportunity for the country's banking system,” said Banco Sabadell business development chief Emmanuel Got and digital consumer finance head Ignacio Capelo, in the press release. 

Sabadell’s Mexican unit had a loan book of 88.1bn pesos at the end of November, according to the latest data from bank and securities regulator CNBV,

Sabadell arrived in Mexico in 1991 with the opening of a representative office in Mexico City. It was licensed to operate as a commercial bank in 2015, with operations being expanded to the cities of Cancun, Culiacán, Guadajalara, León, Monterrey and Mérida.