Brazilian digital challenger banQi is rolling out personal loans aimed at underserved customers. Airfox, banQi’s U.S.-based parent company, is teaming up with ZestFinance to offer the loans.

By using alternative data to underwrite loans, banQi will reach underbanked customers who don’t have access to credit. “With the credit market in Brazil, there is so much pent-up demand,” said Victor Santos, CEO and co-founder of Airfox. “It not only drives acquisition, but it drives retention of that user.” The company will start by offering 30-day, non-revolving loans before launching longer-term installment loans.

To apply for the 30-day loan, banQi customers must take a selfie and upload a picture of their government ID. Customers must offer a rationale for their loan application and, depending on the answer, banQi may pose follow-up questions.

Santos said customers apply for loans for many reasons, from losing a job to medical emergencies to debt consolidation. BanQi will start with loans with 30-day terms and APRs around 8-12%, but it won’t charge customers compounding interest, just a one-time late charge if customers don’t pay on time. The maximum loan amount will be 300 reais, or about $76. banQi also plans to launch longer-term, six-month loans  for a max amount of 1,000 reais, or about $253.

According to Santos, the 30-day loans will launch in mid-October, but the six-month installment loans will likely roll out in December. The small ticket size gives the company a better understanding of customers’ creditworthiness, he noted. The bank will use non-traditional data points like how customers set up their calendars, which apps they download on their phones, contact lists and information garnered from point-of-sale loans customers may have taken out in the past. Since bankQi partners with retailer Via Varejo, customers can acquire further information from store employees. 

According to some reports, Brazilian consumers have difficulties accessing credit, a gap upon which banQi hopes to capitalize. In addition, the Global Findex reports that almost one-third of Brazil’s 209 million people are underbanked. Santos said more than 99% of the lending in Brazil is done through incumbent banks and retailers, creating a massive opportunity for alternative lenders.

See also: Brazilian challenger banQi is working with a mass retailer to lock in customers

Airfox launched banQi in early June, and it partnered with Via Varejo to provide a physical presence for the digital bank. All banQi’s advertising is done through Via Varejo and its subsidiary Casas Bahia stores, and Santos said the company has acquired 150,000 accounts since launching. So far, banQi is set up in 34 stores with 34 more planned by the end of the month, and customers will be able to use all Via Varejo stores for banQi assistance by October.

BanQi, however, isn’t the only company aiming for underserved customers. For example, Banco Original, founded in 2011, also offers digitally-initiated personal loans.

Aurelie L’Hostis, a senior analyst at Forrester Research, said digital-only banks must find ways to gain customers quickly if they are to survive. “Partnering with a large retailer and leveraging its customer base is a good way for a newcomer to reach millions of previously underserved customers with low acquisition costs,” she said.