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Short-term disruption of the financial services industry will most likely come from within: when banks partner with financial services entrepreneurs and embrace innovation. It's happened repeatedly in the payments sector: PayPal and Wells Fargo ten years ago, Square and JP Morgan Chase Paymentech today.
December 12 -
Listen up bankers. A specialty finance firm in California is winning over unbanked consumers with simple, small-dollar loans.
November 1
James Gutierrez, founder of micro-lender Progreso Financiero, is leaving the company to start a new firm that will work on cloud-based payments for the unbanked, he told American Banker on Monday.
Gutierrez, who launched Progreso in 2005, also plans to start an early-stage angel investor fund to help "disruptive credit companies," he said in an interview.
"For me as an entrepreneur, I've always had that itch,' he says of his decision to step away from Progreso. "It's a natural kind of passing of the torch, and a good time for me to move on because the company's in a really strong position."
Progreso provides credit to unbanked Hispanics, who don't have or don't use a bank account. The Mountain View, Calif., firm provides small dollar loans of $500 to $2,500 to those without a credit history.
The company has grown to over 80 sales locations across California and Texas, with plans to expand nationwide, says Gutierrez.
Progreso has appointed Dave Tomlinson as president and acting chief executive following Gutierrez's departure. Tomlinson was most recently an executive vice president and chief marketing officer at Providian Financial/Washington Mutual Card Services.
"If you're lower-income, you really have no access to credit except for payday loans," says Gutierrez, predicting that Progreso will see high double-digit or even triple-digit growth in coming years.
He also says that Progreso is likely to continue expanding into other banking products, pointing to the success of the company's
He adds that he plans to take a short break before getting started on his new projects, but expects to being working on them by May or June.
"I'm looking to build a company that leverages the emergence of smart phones among lower-income groups and provides payment solutions via mobile banking," he says. "Nobody's really built a
"I want to invest in some great entrepreneurs and help them with the small fund that would come in very early and be very active," he adds.
He did not disclose how much the fund would be investing in total, but said he expected individual loans to range from $200,000 to $400,000 per company.
