Tribal Credit, the crypto-focused enterprise payment platform, has raised a $40 million debt offering that was funded through fiat and stablecoins, giving the company additional capital to expand its business services in Latin America.
It has been reported that the hybrid debt round was financed by Partners for Growth, a California-based investment firm, and Stellar Development Foundation (SDF), which is a non-profit organization supporting the growth of the Stellar blockchain.
Tribal Credit said that it will use the capital to fund receivables from its customer base throughout Latin America, particularly Mexico, Brazil, Chile, Colombia, and Peru.
Duane Good, the Chief Operating Officer of Tribal Credit, said that funding receivables from its customer base mean that “Tribal can use the debt facility to help customers” in the aforementioned countries. In other words, “this new debt facility will be used to support our customer's spending on the Tribal platform.”
Good added that “a portion of the debt facility was established with SDF and funded through USDC.” A traditional debt facility, by contrast, “is an agreement with institutional lenders that enables a financial services firm to draw on the facility to support the underlying credit needs of their portfiolio.”
The report said that Tribal Credit provides credit cards and other forms of funding to startups in emerging markets. The company also employs a cross-border payment system supported by cryptocurrency exchange Bitso that allows businesses to convert local currency to Stellar’s USDC stablecoin. Integration with Stellar blockchain began in April 2021 after Tribal received $3 million from the Stellar Development Foundation.
Tribal Credit stated:
"Mexico could be another example of a country adopting cryptocurrencies for remittances, as estimates have shown they could reduce costs by 50% to 90%."
Thus, Tribal and others have identified small businesses as a major source of growth for crypto payments and remittances, especially in emerging markets where access to traditional financial services is often limited. Data from the World Bank shows that small- and medium-sized enterprises in emerging markets create around seven out of 10 jobs, making their access to financing more important.