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Camino Financial reveals insights on U.S. Latinx economy amid COVID19

US-based Camino Financial, a data-driven FinTech platform providing affordable small business loans to help U.S. Latinx businesses has released their survey summarising the credit and financial status of the respective Small Business segment. The company has shared the proprietary data to provide a baseline and track the economic development of the Latinx demographic.

The U.S. Latinx economy is considered a critical driver of economic growth in USA, growing at more than double the rate of Non-Latinx businesses and generating $2.3 trillion in GDP in 2017. The data serves to identify and anticipate the credit needs of U.S. Latinx small businesses in general due to the economic disruption caused by the COVID-19 pandemic.

“Camino Financial stands together with our community of small business owners during this time of great uncertainty. Data is power. Camino Financial has leveraged its unique combination of deep data and advanced AI to produce insights into this essential market. We will continue to build the largest pool of application and performance data on underbanked U.S. Latinx businesses. We plan to use this data to innovate and meet the credit needs of the market,” said Sean Salas, co-founder & CEO of Camino Financial.

The key insights that can be derived from the survey are:

  • Average Latinx Small Business revenue remained relatively flat in Q4 2019
  • Latinx businesses have a lower distribution of Credit Scores compared to Non-Latinx applicants
  • In terms of credit, in Q4 2019, 35% of Latinx businesses applied for loan with no reported Credit Score with average credit score for Latinx applicants being 634.
  • Latinx entrepreneurs launch new businesses at an increasingly rapid rate, 56% of applicants had fewer than 2 years in operations in Q4 2019, compared to 48% in Q1 2019.
  • The average Latinx small business generated $213K in annual revenue, with over 80% of Latinx businesses operating in low to moderate-income areas.

“Camino Financial has developed a proprietary alternative credit scoring system that enables cash-based, thin-file, or no credit borrowers to secure loans at reasonable terms. Data from this survey shows 35% of U.S. Latinx businesses do not have a credit score. It’s important that key stakeholders understand the profile of Latinx businesses and their trends over time, especially in light of a potential financial crisis,” said Kenny Salas, co-founder, and COO of Camino Financial.

Camino Financial uses proprietary AI software to aggregate data and build machine learning models to make credit decisions for thin-file, cash-based microenterprises.

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