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Fintech: LatAm 2017

Fintech: LatAm 2017

Introduction

In November 2015, we defined the greatest FinTech challenges in Mexico, noting that 61% of Mexicans don’t have a bank account, according to the World Bank’s Findex. When we took a step back and analyzed the status of financial inclusion in the region more broadly, we found that the problems were pervasive: In Mexico, Colombia, Argentina, and Chile, less than 63% of the population has a bank account, less than 15% has access to formal savings, and less than 16% has access to formal borrowing. Although each market faces unique challenges in improving financial inclusion, there are three overarching problems impacting the financial health of the region: a need for innovative financial products to meet the needs of specific groups, a lack of financial education, and the prevalence of the cash-based economy.

Problem Statement

Across Latin America, the financial system lacks specific offerings that meet the needs of particular groups, such as small businesses and women. Because most traditional credit, savings, and other products available are focused on the needs of large businesses and high-income individuals, people and companies outside of these well-served groups in both rural and urban communities lack access to quality financial products and the information that could empower them as consumers. The lack of specific offerings and financial education restricts underserved consumers to the informal “cash economy”, which further limits their ability to graduate to formal credit, savings, or other more secure financial products.

Latin America needs a multi-pronged solution to address these financial health challenges and the problems associated with them. Village Capital believes that local entrepreneurs who understand these problems first-hand are best positioned to increase access to affordable financial products and services, in particular those that:

  • Include strong financial education components and transparency around product features to address the needs of specific populations, helping them make better informed decisions when selecting financial products, including insurance, pension plans, and other forms of savings;
  • Enable financial institutions to adopt technology and better gather data to identify users and meet know-your-customer (KyC) compliance, through databases, networks of data, and application of blockchain and related technologies;
  • Formalize financial operations through digital banking and other strategies;
  • Innovate in credit scoring to increase access to more affordable loans for people who previously did not have access to credit; and
  • Improve or build upon existing distribution channel infrastructure for financial institutions to serve rural and urban un- and under-banked populations.

Introducción

En noviembre del 2015 definimos los retos más importantes de FinTech en México, destacando que el 61% de los mexicanos no tiene una cuenta bancaria según el Findex publicado por el Banco Mundial. Analizando el estatus de la inclusión financiera de la región, encontramos que los problemas son generalizados: en México, Colombia, Argentina, y Chile, menos del 63% de la población tiene una cuenta bancaria, menos del 15% tiene acceso a ahorros formales, y menos del 16% cuenta con acceso a préstamos formales. Aunque cada mercado enfrenta retos únicos para mejorar la inclusión financiera, hay tres problemas que impactan la salud financiera de la región: la necesidad de productos financieros innovadores para satisfacer grupos específicos, la falta de educación financiera, y la prevalencia de una economía basada en el uso de efectivo.

Planteamiento del problema

En Latinoamérica, el sistema financiero carece de ofertas específicas que satisfagan las necesidades de grupos específicos, como por ejemplo las pequeñas empresas y mujeres. Debido a que la mayoría de créditos tradicionales, cuentas de ahorro, y otros productos disponibles están enfocados en las necesidades de grandes empresas y personas de alto poder adquisitivo, las personas que no pertenecen a estos grupos bien atendidos, tanto en comunidades rurales como en urbanas, carecen de acceso a productos financieros de calidad y a la información que podría empoderarlos como consumidores. La falta de ofertas específicas y educación financiera restringe a los consumidores desatendidos a la economía informal basada en efectivo, misma que limita aún más su habilidad para obtener créditos formales, ahorros, u otros productos financieros más confiables.

Latinoamérica necesita una solución multifacética para abordar estos desafíos de salud financiera y los problemas asociados a ellos. Village Capital cree que los emprendedores locales, mismos que entienden estos problemas en su día a día, son los más indicados para incrementar el acceso a productos y servicios financieros asequibles, en particular aquellos que:

  • Incluyan componentes fuertes de educación financiera y transparencia en torno a las características del producto para atender las necesidades de poblaciones específicas, ayudándoles a tomar decisiones más informadas al elegir productos financieros, incluyendo seguros, planes de pensión, y otras formas de ahorro;
  • Faciliten que instituciones financieras adopten tecnología y recopilen de mejor forma los datos para identificación de usuarios (“Know-your-Customer” o KyC), a través de bases de datos, redes de datos y la aplicación de blockchain y tecnologías relacionadas;
  • Formalicen operaciones financieras a través de banca digital y otras estrategias;
  • Innoven en la evaluación de crédito para incrementar el acceso a préstamos más asequibles para personas que no contaban con el mismo anteriormente; y
  • Mejoren o utilicen la infraestructura de canales de distribución existentes para que las instituciones financieras puedan ofrecer productos y servicios a poblaciones rurales y urbanas desatendidas, no bancarizadas, y sub-bancarizadas.

 

 

PROGRAM OVERVIEW

Program Dates:

Workshop 1: Sept 6-9 – Bogota, Colombia
Workshop 2: October 11-14 – Mexico City, Mexico
Workshop 3: November 14-17 – Mexico City, Mexico

COMPANIES

Bayonet

Bayonet is the reputation system that helps FinTech companies tackle risk management through collective intelligence.

Contalisto

Contalisto is an online platform that makes it faster, easier and friendlier for Mexican taxpayers to declare taxes.

Doopla

Doopla is a peer-to-peer (P2P) lending platform that provides above-market returns to investors, while charging below-market interest rates to borrowers.

ePayco

ePayco gives merchants secure, user-friendly tools to process digital payments and commercialize products across social media platforms.

ESCALA Educación

ESCALA is an employee benefit plan that offers long-term savings and college preparation advice to help ensure Colombian families attain higher education.

Finciero

Finciero seeks to eliminate the digital payment barriers for the unbanked in Latin America through a virtual prepaid card and other financial services.

Fintual

Fintual seeks to eliminate the digital payment barriers for the unbanked in Latin America through a virtual prepaid card and other financial services.

FINV

FINV is a factoring platform that integrates financial and social responsibility algorithms to channel capital from corporates and individuals to SMEs owners

MUTUO

Mutuo is a lending platform that offers structured supply chain finance solutions for small and medium businesses.

Pago Rural

Pago Rural is a “lend-n-pay” platform that allows farmers to access financing to buy seeds, ag-chemicals and fertilizers in a simple, agile and safe way.

Rapicredit

Provides 30-day loans to the BoP who often succumb to predatory and illegal payday-like loans due to lack of access to formal credit.

ADVISORY BOARD

Alejandro Guizar Billpocket
Alicia Ferrer FIG, IFC
Armando Kuroda Credilikeme
Clementina Giraldo CAF - Development Bank of Latin America
Daniela Calleja Mountain Nazca Colombia
Gabriela Zapata CGAP/ World Bank Group
Nathan Lustig Magma Partners
Sergio Zúñiga BBVA Colombia
Susana García-Robles Multilateral Investment Fund