From Growth at All Costs to Sustainable Profitability: Lessons from a Leading LatAm Fintech

Over the past decade, easy capital, VC expectations, and aggressive customer acquisition targets led many fintechs to pursue scale with a “growth at all costs” mindset. Too often, at the expense of underlying credit performance and profitability. As interest rates have risen and funding tightened, lenders across emerging markets are now facing a stark new reality: growth only matters if it generates durable unit economics.

At Ensemblex, we’ve helped several fintech lenders navigate this shift. One notable case — a high-growth consumer credit business operating across Latin America — illustrates how to turn escalating losses into a path back to profitability within 12 months.

The Challenge: Strong Topline Growth… Poor Portfolio Quality

The client had achieved rapid expansion, acquiring millions of users and booking more than 500,000 BNPL and installment loans annually. But behind the façade of growth, risk metrics were deteriorating:

• Delinquency rates trending >30%

• Falling repayment rates even among “prime” borrowers

• High CAC relative to customer LTV

While the company had a strong analytics team and robust data infrastructure, its risk selection and pricing discipline had eroded as it prioritized topline metrics. They now faced ballooning credit losses and investor pressure to prove a credible path to profitability.

Our Approach: A Playbook for Sustainable Growth

We engaged with the client over a six-month period to diagnose root causes and implement rapid-fire improvements across five workstreams:

1. Credit Policy Refinement

We re-underwrote the portfolio segment by segment, identified sub-segments destroying value, and cut off or repriced the riskiest tiers. Simultaneously, we leaned in on the highest-performing borrower groups (even if they didn’t represent “growth darlings”).

2. Profit-Driven Pricing Strategy

We introduced a contribution margin-based pricing model that aligned APRs and loan tenors with expected loss and funding cost dynamics. Products with previously negative unit economics were either sunsetted or restructured.

3. Test-and-Learn Framework

Instead of sweeping policy changes, we helped the client adopt a structured A/B testing framework, enabling faster insights with contained downside. The team ran more than 30 tests over three months, accelerating learning and derisking larger rollouts.

4. Collections Overhaul

We revamped early-stage collections with personalized contact strategies, powered by borrower-level behavioral data, which in turn raised right-party contact and cure rates by double digits.

5. Management Cadence

We worked alongside leadership to revamp the internal dashboarding and weekly “credit council” structure, fostering faster decision-making and better alignment between Risk, Product, and Finance.

The Outcome: Near-Term Wins and Long-Term Capabilities

Within nine months of implementation, the lender achieved:

• 30% reduction in charge-offs

• 45% improvement in contribution margins on the core installment product

• Return to positive unit economics on new originations

Just as importantly, the organization developed the muscle to continuously adapt — driven by richer data segmentation, a disciplined testing culture, and cross-functional accountability.

This turnaround offers several lessons for founders, risk leaders, and lenders looking to make the shift from growth to profitability:

• Not all growth is created equal. Without an understanding of how each segment contributes to your economics, rapid acquisition can quickly destroy value.

• Pricing is your strategy. In high-risk markets, APRs and tenor structures must be tightly tied to expected performance and funding costs (not merely competitive benchmarks).

• Test fast, test small. Structured experimentation allows credit operators to make changes while managing risk.

• Collections is not an afterthought. Intelligent, data-driven early-stage collections can make or break contribution economics.

• Cross-functional governance is essential. Sustainable credit businesses require tight alignment between growth, risk, and finance.

As fintech credit models face their toughest test in years, the winners will be those who can both scale smartly and earn sustainably. If your organization is facing similar challenges — or planning for what’s ahead — Ensemblex can help you chart a clearer, data-backed path to profitability.