Javier Ruiz Galindo began his career working in brokerage firms, where he managed investment portfolios for families and individuals. He worked at Actinver and another brokerage firm all while studying industrial engineering. Later, he decided to temporarily pause his professional career to finish his studies. This combination of practical experience and academic training has given him a unique and valuable perspective on the financial world. We are excited to learn more about his journey and the projects he has led.
What is Curadeuda and what problem does it solve?
Curadeuda is a credit repair company. We act as an intermediary between debtors who have stopped paying their loans and are in collections, and their creditors. Our goal is to help debtors settle their debts as quickly as possible and with the least amount of money. The idea came about when Daniel Carvallo and I, co-founders and co-CEOs of Curadeuda, worked at a similar company in 2010. We wanted to improve the process and use technology to do more with less. We founded Curadeuda in 2011 to offer a more efficient and customer-focused solution to credit repair.
What sets Curadeuda apart?
We focus on customer service. We have a very high NPS, around 80 points. From the start, we advise the client to ensure they really need our services. During the 16-20 month program, we provide continuous support to motivate them to save and settle their debts. We use technology to make the process more efficient, allowing clients to hire our services online in just a few steps, although they can always speak with an advisor if needed.
What is the market size and who are your clients?
Consumer credit in Mexico is growing. Currently, there are 27 million credit cards in Mexico, a country with 130 million people. With the rise of new fintechs, we see an increase in credit card issuance. The credit card market currently stands at around 550 billion pesos (US $30B) with an adjusted delinquency rate of 15%. This is a market with great potential. At Curadeuda, we focus not only on credit cards but also on personal loans, department store credit, and all types of unsecured consumer credit.
An average Curadeuda client has debts of around 140,000 pesos (US $7,500) spread across 2 to 3 products, such as credit cards and bank consumer loans. The most serious problem is that these clients typically have monthly incomes of only 14,000 pesos (US $750), meaning they are indebted by an amount ten times their monthly income. In this context, getting out of debt becomes practically impossible without help.
How do you work with banks and financial institutions?
When the bank or creditor stops receiving payments, they start their collection process, making calls, sending messages, and contacting references. As time passes without receiving payments, the bank begins to offer discounts to settle the debt, known as “quitas.” At Curadeuda, we do not negotiate each account individually; instead, we consolidate all the debts of our clients, giving us greater bargaining power.
The benefit of a credit repair company is that it helps all parties involved. A client with a debt of 140,000 pesos can settle it with a 70% discount, which really helps the client pay less than what they owe and get out of debt faster. Curadeuda then charges a success fee for the negotiation and settlement. The bank also benefits from the process byrecovering delinquent accounts that it could not recover through traditional efforts. This is the main advantage of credit repair.
Why do Mexicans get into debt?
The three main reasons clients come to Curadeuda are:
- Bad use of credit: This is the most common reason. It is not something that happens overnight but rather a snowball effect. Clients get their first credit card start as a “totalero,” someone who pays off the full balance each month. But one month, they can’t pay the full amount and only make the minimum payment. Then, it becomes easy to continue paying the minimum, but with typical interest rates ranging from 80-100% annually, their debt grows. Then they get another credit card, and the debt quickly becomes unmanageable.
- Medical or family emergency: Suddenly, they need to use a large amount of money and then cannot pay it off.
- Job loss or income reduction: Without an emergency savings fund, they become unable to manage their expenses during tough times.
What is the “secret sauce” of your technology?
The “secret sauce” of our success has been the result of many years of experimentation. First, we connected directly to the credit bureau so that clients, by entering their data, could check their credit reports. This allows us to offer them a proposal for how their debt payback program would look in Curadeuda. Now, this entire process is completely automatic.
Before, when we started operations, we had to talk to the client, explain what Curadeuda did, help them get their credit report through the credit bureau’s portal, interpret it, and then make a proposal in Excel, capturing the debt data and sending it to them. Today, this whole process is automated. The client can add or remove debts from their program and see how much they save monthly to make a proposal adapted to their current capacity.
Technology has made the initial part of the funnel very efficient. Once clients are with us, follow-up can also be highly automated. We send clients messages and reminders to motivate them to keep saving and to settle their debts as soon as possible.
What have been the biggest challenges and how have you overcome them?
Since 2022, we have faced several major challenges. One of the biggest has been the increase in customer acquisition costs through traditional means, primarily digital marketing investment. These rising costs affected our unit economics, so we had to find new ways to continue acquiring customers and more debts.
Fortunately, we found a solution by establishing partnerships with companies like Uber, Rappi, and Didi to help their driver and delivery partners settle their debts. This allowed us to implement a B2B2C sales model: the sale is made with the company, but the direct benefit is for the individual, who discovers and uses Curadeuda’s services.
This approach helped us overcome one of the main challenges, and we continue to look for innovative ways to acquire new customers without requiring intensive capital investment, especially given the current capital-raising circumstances. Our goal is to do much more with less.
What is your day-to-day like, and how do you divide responsibilities with your co-CEO Daniel?
We often get asked how the co-CEO role works, and the truth is we have it very well defined. As co-CEO, I handle the front end of the company: marketing, customer acquisition, and strategic partnerships. I am constantly selling, ensuring the commercial area works well, and finding new ways to acquire customers. Daniel is in charge of customer service, negotiations with creditors, and technology oversight. His main challenge is to negotiate efficiently with the banks.
What’s next for Curadeuda in the next six months?
We are focused on continuing to grow in Mexico, with the goal of increasing the number of clients and the monthly new debt entered by 70-100% compared to 2023. We want to double the number of clients in the next six months.
To conclude, what are your recommendations for maintaining healthy finances for the Mexican public?
To maintain healthy finances, we must start with a budget, spending less than we earn. The most important thing in using credit cards is to be a “totalero,” that is, to pay off the full balance each month. We should not leverage credit on credit cards, as it is extremely expensive.
Additionally, having an emergency savings fund is crucial. This fund should cover at least three months of your fixed expenses, although ideally, it should save the equivalent of six months. This way, if you lose your job or decide to change jobs, you can get through those six months without a fixed income.
This post is also available in: Español (Spanish)
