Novacard bets on becoming a Sofipo and gaining scale in consumer lending

The fintech is looking to shift into a regulated category to expand products and funding, in a market where Sofipos serve millions of users and compete on trust.

In Mexico’s financial ecosystem, where digitization has intensified competition for consumer credit, Novacard is preparing a strategic shift: seeking authorization to operate as a Sociedad Financiera Popular (Sofipo). The company, which currently operates as a SAPI and provides credit with a focus on women and people over 30, believes that making the regulatory leap could lower operating costs and open the door to products it cannot offer as robustly today, such as yield-bearing accounts and higher credit lines.

The move targets a segment that, according to figures circulated by the market itself, includes more than 35 million customers. For Novacard, entering that universe is not just a license change: it means competing for trust—both from users and regulators—at a time when Mexican consumers are more sensitive to the cost of financing and the clarity of terms, after a prolonged period of high interest rates in the country.

The company has operated since 2023 and reports about 100,000 customers. Its medium-term goal is to scale into the hundreds of thousands of users, supported—according to its strategy—by a “more established” segment in terms of age and payment habits. At the same time, its product aims to stand out with rewards (cashback in categories such as groceries) and a short-cycle repayment structure designed to give users greater predictability around due dates and payoff amounts; if the balance is not paid on time, a fixed daily charge applies.

Novacard’s plan comes as the competitive landscape among Sofipos is shifting: several major players have moved—or are seeking to move—toward bank charters, driven by the need for cheaper funding and a broader suite of services. That reshuffling creates room for new entrants to try to win customers, as long as they can demonstrate risk discipline, operational capabilities, and strong consumer-protection standards.

Regulation, funding, and trust: the value (and the cost) of being a Sofipo

Becoming a Sofipo can offer concrete advantages over operating as a SAPI: a clearer regulatory framework and the ability to take deposits from the public under specific rules, which often improves access to funding and makes it easier to build a more complete “account” offering. In a Mexican environment where consumer credit competes with pressure on disposable income—driven by services inflation, housing costs, and still-restrictive rates—the cost of funding and delinquency management become decisive to sustaining fast growth without weakening loan performance.

But the leap also raises the bar: it requires investment in compliance, audits, internal controls, and corporate governance, along with stricter reporting standards. For users, the takeaway is often twofold: on one hand, greater formality and oversight; on the other, an expectation of products more comparable to what banks offer, from yields to related services. In that context, fee transparency, clear communication of costs, and service quality stop being “nice-to-haves” and become baseline requirements for retaining customers.

Novacard’s bet on an older segment also reflects an ongoing debate in the industry: rapid growth driven by younger customers can bring volume, but not necessarily strong repayment quality—especially when credit expands in a high-cost money cycle. In Mexico, where financial inclusion is improving but remains uneven by region and income level, fintechs seeking sustainable scale often face the same dilemma: grow fast, or grow prudently by prioritizing profiles with greater job stability and repayment capacity.

Looking ahead, the performance of players like Novacard will depend on their ability to balance commercial expansion, disciplined origination, and efficient funding. If it manages to complete its transition to a Sofipo—either through an acquisition or via a new authorization—it would join a segment with a broad user base, but also intense competition on rates, yields, and reputation, in a country where consumers are increasingly informed and comparison-driven.

In perspective, the attempt to migrate to a Sofipo shows how digital credit in Mexico is entering a maturation phase: less emphasis on growth at any cost and more focus on regulation, trust, and model sustainability, especially as financial conditions remain a natural filter on risk appetite.