Interest Rates on Loans Hit 790% in Latin America's Big Fintech Shakeout
Investors flooded Latin America’s startups with cash. Now the herd is thinning with the strongest riding out the turmoil
The Nubank mobile app.
Photographer: Alejandro Cegarra/BloombergThe numbers sound almost implausible. As Brazilian consumers fall behind on debts and rattle a slew of financial-technology startups in Latin America’s largest economy, one venture keeps notching ever higher.
Nu Holdings Ltd. now has reeled in enough customers — more than 85 million and counting — to rank among Latin America’s largest financial firms. The online bank and credit-card issuer, with early backers including Warren Buffett’s Berkshire Hathaway Inc., has watched its stock soar more than 90% this year, for a market value 200 times greater than its most recent 12-month reported profits. And to protect earnings, the firm has boosted rates on its cards — in some cases touching 790%.