Newt Corporation (“Newt” or the “Company”), an integrated digital financial services platform, today announced that it has entered into an agreement with Element Bank (the “Agreement”) to issue credit and branded debit in conjunction with Newt’s upcoming lending program targeting businesses, credit unions and government employee programs.
The software and credit solutions combine an enhanced mobile application and a secure digital wallet, providing self-service functions, such as accessing credit at reduced costs and solving problems that employees regularly face, while managing their finances with a better customer experience.
Under the terms of the agreement, Newt’s subsidiary, in conjunction with Element Bank, will issue branded credit and debit cards to each employee who downloads and logs into the Loan-as-a-Service (“LaaS”) application. ) of Newt, white-labeled by his employer. Credit program cards are directly linked to a mobile wallet in the mobile app, allowing employees to make payments with the card, pay bills, receive salary advances and access credit for purchasing products online and in-store, while building their credit score.
Sergio Maya Aleman, CEO Latin America of Newt, said, “Signing this agreement with Element Bank gives us more tools to serve our customers and expand our network in Mexico. This partnership strengthens our ability to integrate digital solutions for our B2B customers and enriches our business model, including our credit services. Our goal is to offer more financial accessibility and support social inclusion by offering our corporate clients effective solutions for their employees. We believe this will allow Newt to grow, increase our transactions and our participation in credit income.
According to The Economist, as of December 2020, only 37% of Mexicans over the age of 15 had a bank account and some 86% of all payments in Mexico were made in cash. According to Fitch Ratings, payroll-deductible loans have become a relevant product for non-bank financial institutions (“NBFIs”) and banks nationwide in recent years. As of December 31, 2020, payday loans represented 6.0% of loans from banks and AMDEN (Mexican Association of Payroll Lenders).
Newt intends to provide access to more competitive credit offers with reduced fees to employees on their mobile phones, targeting the unbanked market. Newt’s goal is to use an agile, easy-to-use, and resilient technology architecture, and provide access to competitive credit and financial services on its platform to users who may be traditionally unbanked, helping them establish credit and access the digital economy, while working with employers. for the benefit of the financial well-being of their employees.