Machine Learning for More Equitable Credit Powers Airfox-ZestFinance Partnership

Airfox, a startup providing transformative financial services to emerging markets, today announced a partnership with artificial intelligence (AI) leader ZestFinance and Brazilian retail giant Via Varejo to deliver a new microcredit model with next-generation algorithmic infrastructure predicated on more equitable credit risk analysis. Combining machine learning (ML) and predictive analytics to extend credit opportunity to underserved populations without incurring greater risk, this partnership will allow Airfox and Via Varejo to capitalize on a significant market opportunity that is ripe for disruption.

Airfox’s new partnership with ZestFinance will allow both companies to capitalize on a significant market opportunity prime for disruption.

Airfox plans to develop a more holistic, transparent, digital picture of an individual’s credit potential to expand microcredit services, offer lower interest rates, and grow financial inclusion for the underbanked (who typically operate in a cash-based economy without a formal credit history). The partnership with ZestFinance also extends to banQi, the Airfox digital challenger bank developed in partnership with Via Varejo to serve the 50 million Brazilian consumers who lack a traditional financial institution.

Airfox aims to leverage Zest ML for modernized credit scoring and future loan and credit applications. In order to better calibrate risk, ZestFinance technology can analyze large alternative data sets including the massive Via Varejo database of 60 million customers, as well as utility and service billing, banking, and digital payment information to serve customers lacking traditional credit histories with affordable credit.

Airfox’s banQi expects to also leverage the model to develop personal loan products via the banQi digital banking app, with services ranging from debt consolidation to paying off high-ticket expenses for education, healthcare, funding small business, and more. “Accessibility to capital has not kept up with the digitization of life, especially in emerging markets,” said Justin Hoffmann, executive vice president, Airfox. “This is a landmark milestone for both Via Varejo and its customers, as the company will now be equipped with a next-generation, automated machine learning platform for credit risk analysis that incorporates alternative data sources in hopes to increase accessibility to credit for millions nationwide.”

Airfox’s digital challenger bank, banQi, is designed to transform the lives of over 50 million Brazilians shut out of traditional banking institutions through intuitive and affordable financial services.

Innovating for financial inclusion

With current credit concentrated and weighted with exceptionally high rates, financial service cost for Brazilian consumers and small businesses is one of the highest in the world. According to The Wall Street Journal, five banks control 82% of the country’s consumer credit and “many Brazilians don’t have a credit history that lenders can access to gauge individual risk and lower rates to clients with higher scores.” As the eighth-largest economy in the world, Brazil’s potential is enormous, but there’s also an enormous service gap. An innovative process that is more inclusive and supplies greater access to credit will foster growth and bridge that gap.

Like the rest of the modern world, Brazilians rely on credit and installment payments for a variety of transactions: “Over 60% of e-commerce is paid for in installments, and 64% of Brazilians cannot afford to make purchases without spreading the payments over several months.” However, in 2018, annual consumer interest rates for credit cards reached 270% for unpaid balances. Such crippling interest inordinately impacts disposable income percentages and discourages financial service consumption amongst an enormous population of lower and middle income consumers. Establishing a more accessible system of credit based on larger pools of data, dynamic risk models, and reasonable rates is necessary.

The partnership will help gather more data for future integration of loans within banQi’s financial services.

This ZestFinance partnership will catalyze banQi and Via Varejo in leapfrogging current credit model system with more relevant data integrated into more advanced consumer lending technology built for inclusion and service expansion.

“The digitization of processes and payment options creates entirely new avenues for innovation in how we serve our customers,” said Felipe Negrao, executive director, Via Varejo. “More data and better analysis can ensure more accurate loan decisions. The ZestFinance approach to innovation through machine learning is exactly what we’ve been looking for, and will put us in a more competitive position.”

Leveraging tech for better financial services

With the partnership of both ZestFinance and Via Varejo, Airfox’s banQi is positioned to combine new credit risk technology, a variety of alternative data sources, and immense data and distribution synergies to safely bring credit to millions of Brazilians. According to Goldman Sachs, banking services, payments, lending, and insurance represents US$15.9 billion (BRL$60 billion) in estimated annual revenue potential in 10 years for emerging fintechs.

Douglas Merrill, CEO of ZestFinance

Building its digital challenger bank on the principles of financial inclusion and mechanisms for establishing digital trust, Airfox recently secured three additional major partnerships — Mastercard, Cielo, and Zurich Insurance — that expand on its existing partnership with Brazil retail giant Via Varejo. The new Airfox contracts exceed US$77 million (BRL$300 million).

“We’ve proven that machine learning works in all types of credit and in every geography,” said Douglas Merrill, chief executive officer, ZestFinance. “Our engineering team looks forward to applying our machine learning expertise to the Airfox and Via Varejo retail rollout and helping millions of their customers to reduce credit rates.”

About Airfox

Airfox is on a mission to accelerate financial inclusion for the underbanked within emerging economies. Airfox aims to create an entirely new financial services model for the underbanked that democratizes access to capital and financial services with a mobile-first solution. Airfox is a venture-backed, financial technology company based in Boston and São Paulo. To learn more about the future of decentralized digital banking, visit

About Via Varejo

Via Varejo is one of the largest consumer electronics retailers in Brazil and the world, responsible for operating physical stores and e-commerce sites under the Casas Bahia, Pontofrio, and Extra brands. Founded in 2010 as Globex Utilities SA and officially named Via Varejo SA in 2012, the company is present in more than 400 cities and 20 states and the Federal District, with about 1,000 physical stores, 26 distribution centers, and about 50,000 employees across the country. In 2018, net sales reached R$ 26.9 billion. The company has traded on the BM & FBOVESPA since 2013.

About ZestFinance

ZestFinance helps lenders use machine learning to develop and launch highly accurate and transparent credit risk models. Zest’s software tools enable our clients to increase revenue, reduce risk, and ensure compliance. ZestFinance was founded in 2009 by Douglas Merrill, the former CIO of Google, and a team of former Google employees with the mission of making fair and transparent credit available to everyone. The company is headquartered in Los Angeles, California. For more information, visit Contact ZestFinance at

Forward Looking Statements

This press release contains forward-looking statements of the Company that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release are forward-looking statements. Forward looking statements can be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions. The forward-looking statements in this press release represent the Company’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. However, while it may elect to update these forward-looking statements at some point in the future, it has no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the Company’s views as of any date subsequent to the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.



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Accelerate financial inclusion in emerging markets using technology built with trust and inclusion.