Brazilian Neobank C6 is launching credit with vehicle collateral

July 18, 2022
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Ricardo Bonzo Filho (former CEO of iCarros) arrived at C6 Bank with the mission of leading the newly created vehicle vertical. In December, the digital bank launched the financing of new and used vehicles through dealerships and multi-brand stores.

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Now, a little over six months later, C6 is launching credit with vehicle collateral - also known as 'car equity' - reveals the partner and head of vehicles at the bank, exclusively to Finsiders.

The new product is already being offered to a group of customers and is expected to be available to the entire base in the coming months.

"We found the opportunity to enter this segment, which is quite concentrated, bringing a younger and more modern experience to the end customer," explains Ricardo. The credit request is made through the bank's application, and the customer receives the money in the account within one business day. "Since you are already logged into the app, what we ask for is basically the license plate. And facial biometrics is also already embedded in the app. We won't create any obstacles to formalize the credit."

In this first moment, C6 will allow refinancing up to 70% of the vehicle's appraised value - other players in the market for a longer time, such as BV and Creditas, already allow up to 90% of the value. "It is still a pilot, but we will expand it. We are calibrating the credit to make this offer in the market more polished", acknowledges the executive.

In this modality, the client will have access to a minimum credit of R$ 5 thousand, and may reach R$ 70 thousand. The payment term is up to 48 months, with interest starting at 1.44% a month - rate valid for bank account holders.

To contract the financing, it is necessary to have a light vehicle (up to 3.5 tons gross weight) up to 10 years old, registered in your own name, and with no pending issues.


Potential

The executive estimates that a third of the total customer base of individuals (PF) of C6 - today with more than 16 million in total, between PF and PJ - is the "target" for the car equity product. "We started by sending daily pushes to 7,000 different clients within the app, and the intention is to expand [this group] to 9,000," he says.

Initially, the new credit line will be offered to a restricted base of account holders, and for the time being the bank does not intend to launch a large advertising campaign, as it has done in previous launches, with the model Gisele Bündchen as the poster girl.

"Of course the natural evolution is that we start receiving demands from clients requesting credit via chat", Ricardo points out. According to him, despite the bad economic scenario, with inflation and high interest rates, the modality tends to be very sought after by customers. "We are entering in a proper timing and, more than anything, listening to the client and going back to the drawing board", says the executive, who does not open projections regarding the credit volume for this year.

About the size of the market, Ricardo quotes data from B3, referring to February this year. The credit with vehicle warranty has an average monthly production of approximately R$ 693 million, with an average ticket of R$ 36 thousand and an average term of 36 months. "The consumer doesn't know the product. Internally, we will carry out educational actions to show how much the customer can save by contracting this type of credit", says the executive.


Market

In June, the financed sales of vehicles - a number that includes light cars, motorcycles, and heavy vehicles all over the country - fell 13.1% in comparison to the same month in 2021, according to data from B3. In the year-to-date, the financing of vehicles totaled 2.6 million units, which represents a drop of 9.2% compared to the same period in 2021.

The automotive sector also suffers with the shortage of semiconductors. In its latest projection, published a few days ago, the National Association of Automotive Manufacturers (Anfavea) revised the growth of vehicle production this year from 9.4% to 4.1%. In relation to sales, the entity foresees a modest increase of 1%, against the previous estimate of 8.5% growth in 2022 compared to last year.


Background

C6 is launching vehicle refinancing two weeks after it announced entry into another secured mode, home equity - news revealed by Finsiders in July last year. Both lines add to a portfolio that already brings together more than 30 solutions, in a complete banking proposal, adopted since the beginning by C6.

Present in 100% of Brazilian municipalities, the digital bank offers a free checking account, a global multi-currency account, debit and credit cards, a loyalty program, an investment platform, and several types of credit for individuals and companies, among other products and services.

Founded by former BTG Pactual partners in 2019, C6 has the US bank JP Morgan as an investor, which announced the purchase of 40% of the operation a year ago, a deal that was approved by the Central Bank (BC) in February 2022.

According to the latest financial data released, C6 ended 2021 with a net loss of R$ 692 million, against losses of R$ 607 million in the previous year. Credit operations grew 7x on the same basis of comparison, to R$7 billion. Shareholders' equity reached R$1.2 billion at the end of 2021, compared to R$723 million in 2020.

Original Article in FINSIDERS

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

Now, a little over six months later, C6 is launching credit with vehicle collateral - also known as 'car equity' - reveals the partner and head of vehicles at the bank, exclusively to Finsiders.

The new product is already being offered to a group of customers and is expected to be available to the entire base in the coming months.

"We found the opportunity to enter this segment, which is quite concentrated, bringing a younger and more modern experience to the end customer," explains Ricardo. The credit request is made through the bank's application, and the customer receives the money in the account within one business day. "Since you are already logged into the app, what we ask for is basically the license plate. And facial biometrics is also already embedded in the app. We won't create any obstacles to formalize the credit."

In this first moment, C6 will allow refinancing up to 70% of the vehicle's appraised value - other players in the market for a longer time, such as BV and Creditas, already allow up to 90% of the value. "It is still a pilot, but we will expand it. We are calibrating the credit to make this offer in the market more polished", acknowledges the executive.

In this modality, the client will have access to a minimum credit of R$ 5 thousand, and may reach R$ 70 thousand. The payment term is up to 48 months, with interest starting at 1.44% a month - rate valid for bank account holders.

To contract the financing, it is necessary to have a light vehicle (up to 3.5 tons gross weight) up to 10 years old, registered in your own name, and with no pending issues.


Potential

The executive estimates that a third of the total customer base of individuals (PF) of C6 - today with more than 16 million in total, between PF and PJ - is the "target" for the car equity product. "We started by sending daily pushes to 7,000 different clients within the app, and the intention is to expand [this group] to 9,000," he says.

Initially, the new credit line will be offered to a restricted base of account holders, and for the time being the bank does not intend to launch a large advertising campaign, as it has done in previous launches, with the model Gisele Bündchen as the poster girl.

"Of course the natural evolution is that we start receiving demands from clients requesting credit via chat", Ricardo points out. According to him, despite the bad economic scenario, with inflation and high interest rates, the modality tends to be very sought after by customers. "We are entering in a proper timing and, more than anything, listening to the client and going back to the drawing board", says the executive, who does not open projections regarding the credit volume for this year.

About the size of the market, Ricardo quotes data from B3, referring to February this year. The credit with vehicle warranty has an average monthly production of approximately R$ 693 million, with an average ticket of R$ 36 thousand and an average term of 36 months. "The consumer doesn't know the product. Internally, we will carry out educational actions to show how much the customer can save by contracting this type of credit", says the executive.


Market

In June, the financed sales of vehicles - a number that includes light cars, motorcycles, and heavy vehicles all over the country - fell 13.1% in comparison to the same month in 2021, according to data from B3. In the year-to-date, the financing of vehicles totaled 2.6 million units, which represents a drop of 9.2% compared to the same period in 2021.

The automotive sector also suffers with the shortage of semiconductors. In its latest projection, published a few days ago, the National Association of Automotive Manufacturers (Anfavea) revised the growth of vehicle production this year from 9.4% to 4.1%. In relation to sales, the entity foresees a modest increase of 1%, against the previous estimate of 8.5% growth in 2022 compared to last year.


Background

C6 is launching vehicle refinancing two weeks after it announced entry into another secured mode, home equity - news revealed by Finsiders in July last year. Both lines add to a portfolio that already brings together more than 30 solutions, in a complete banking proposal, adopted since the beginning by C6.

Present in 100% of Brazilian municipalities, the digital bank offers a free checking account, a global multi-currency account, debit and credit cards, a loyalty program, an investment platform, and several types of credit for individuals and companies, among other products and services.

Founded by former BTG Pactual partners in 2019, C6 has the US bank JP Morgan as an investor, which announced the purchase of 40% of the operation a year ago, a deal that was approved by the Central Bank (BC) in February 2022.

According to the latest financial data released, C6 ended 2021 with a net loss of R$ 692 million, against losses of R$ 607 million in the previous year. Credit operations grew 7x on the same basis of comparison, to R$7 billion. Shareholders' equity reached R$1.2 billion at the end of 2021, compared to R$723 million in 2020.

Original Article in FINSIDERS

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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