Mexican financial technology firm Zenfi has raised $8.5 million in a funding round led by Magma Partners, with participation from Redwood Ventures, Polígono, Conny & Co and an AngelList syndicate led by Peter Livingston.

CEO and founder Luis Rubén Chávez aims to use the funds to introduce a range of new features, including debit and credit products, to the platform, which has more than 3 million users.

Chávez, who said Mexico's consumer finance market was "basically broken", founded Zenfi seven years ago as a free platform for financial health that offered free credit tracking, personal finance management, low-interest rates and integration with open banking.

The platform has proved successful, with more than $100m in loans distributed, a 3.4% default rate and $10m in annual recurring revenue generated through interest rates, credit score checks and investment products.

The startup claims to have one of the lowest interest rates in Mexico, an average of 19% APR. Zenfi also offers free credit tracking and integrates with open banking.

With this funding, the startup also plans to expand into three other Latin American countries and raise the number of loans distributed from $100m to $2bn. He plans to add to Zenfi's current 60-person team to support the expansion.