Fintech Companies in Colombia. Challenges and achievements

FINTECH COMPANIES IN COLOMBIA Challenges and achievements

Javier Raventรณs

FINTECH COMPANIES IN COLOMBIA Challenges and achievements Javier Raventรณs

CREDITS: AUTHOR / Javier Ignacio Raventós Núñez EDITORIAL COORDINATOR / Javier Ignacio Raventós Núñez DESIGN / Beatriz Osuna Patiño PRODUCTION DIRECTOR / Germán Izquierdo Orejuela PREPRENSA DIGITAL / Digital Offset S.A.S. PRINT / Promograf S.A.S. EDITORS / José María Raventós – Portafolio FREEPIK IMAGES / 11, 15, 19, 21, 25, 28, 33, 34, 35, 71, 79, 100, 109, 115

ISBN: 978-958-56194-6-3 All rights reserved; reproduction prohibited Total or partial without the express approval of the author.

This book was finished printing in Colombia in June 2020

First edition

CONTENT 4 INTRODUCTION Andrés Albán

6 FOREWORD

Javier Raventós

8 CHALLENGES FOR THE FINTECH ECOSYSTEM Erick Rincón Cardenas

11 FINTECH NUMBERS IN COLOMBIA Asociación Colombiana Fintech

14 FINTECH, NEW ALLIES IN THE ORANGE ECONOMY Ignacio Gaitán

16 FINTECH WAKES UP THE BANK AND THE RENEWAL. IS THE INNOVATION MOTOR THAT DEMOCRATIZE FINANCE Pablo Gracia Betorz

20 DIGITIZATION FOR FINANCIAL AND SOCIAL INCLUSION Carolina Vélez

23 FINTECH REGULATION

36 FINSOCIAL 44 RESUELVE TU DEUDA 52 DAVIPLATA 60 BANKAMODA

68 RAPICREDIT

76 TRANSUNION

84 CREDISSIMO 92 OLIMPIA 100 EXCELCREDIT 108 BERIBLOCK

116 OMNILATAM

124 ADDI

132 ADL 140 SIIGO

Felipe Lega

148 CÁMARA DE COMERCIO

AND EXPECTATIONS FROM THE ENTRANCE TO COLOMBIA

156 REFERENCIA

27 NEOBANKS: CHALLENGES Laura Tovar

30 FINTECH IN A NATION IN TRANSITION

Kenneth Mendiwelson

DE BOGOTÁ

164 PUNTORED - PUNTOPAY 172 TOWERTECH AMERICAS 180

THANKS

CONTENIDO |

3

PRESENTATION

ANDRÉS ALBà N

CHAIRMAN OF THE COLOMBIA FINTECH BOARD, CEO PUNTORED

It is impossible to talk about Fintech without thinking about entrepreneurship. That is why Javier RaventĂłs in Fintech Companies in Colombia; Its challenges and achievements, offer us that more entrepreneurial vision of our industry. Starting from the collaboration of recognized voices in regulation, innovation and union affairs, it takes us to know the history of some of the most striking fintech success stories in our country. In these pages we will have the opportunity to learn about the vision, the culture and of course the services of various companies that represent Fintech in Colombia. Additionally, we will meet the people behind these ventures, understanding that it has motivated them to want to break into traditional business models with innovation. We find consolidated companies in scaling stages that have managed to captivate an important market with their products, such as Finsocial, or Davivienda's intra-venture, Daviplata. But it also reflects the spirit of the startups that break in with force, such as the case of Referencia or Puntopay. Additionally, this select sample of companies will show us throughout the pages why Fintech has been recognized by various government actors, investors and academics as a great opportunity to promote the development of our country. And

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it is that Colombia is eager to boost its economic growth with new creative and technology-based industries, but that at the same time sustain its growth in profitable and sustainable models.

This sustainability is achieved if there is a large enough potential market that in the case of financial services, it is represented by the millions of Colombians who feel totally or partially neglected by traditional banking. Thus, and to understand the relevance of the sector, it is worth mentioning three characteristics common to Fintech companies: First, it is worth noting that according to a survey by Colombia Fintech its associates are investing about 50% of their budgets in Innovation and Product Development. 39% of its employees are developers and / or profiles related to product innovation. This is much higher than the average for other industries or the government's plan to raise investment in I+D to 1.5% of GDP. Fintech companies generate high-quality employment and invest in taking financial services to another level. They are innovative products designed to find new ways to reach people who did not have access to these services. On the other hand, it is also striking that most of the Fintech companies in our country have been founded in the last 5

years, by entrepreneurs who average 34 years.

Its employees are young, mainly between the ages of 25 and 35. This is not a minor piece of information, especially if one takes into account that the businesses that revolve around financial services tend to be linked to companies with more experience. It is very relevant for a country that its young people are interested in innovating in a highly traditional, regulated and risk sector. Nothing that adds more than to unite the diversity of thought, the creativity of women and the impetus of young people, with the experience and prudence of banking.

In the book we have some examples of these young entrepreneurs such as ADDI, who have managed to attract capital from the main Silicon Valley funds or from women at the forefront of ventures such as Bankamoda, who understand better than anyone the financial needs of niches such as that of fashion and clothing. It is the job of regulators, academia and other industry players to guide these young people to recognize the importance of having a solid financial sector, while prioritizing the need to think differently to go beyond what has been achieved. Finally, Javier has recognized that there is no better way to take an X-ray of an industry than by representing their companies and the way they collaborate

with each other. In the book, the Colombia Fintech guild plays an important role through its spokespersons and its associates. Nothing better than understanding the institutions that group companies to see reflected the spirit and culture of an industry. Colombia Fintech is young and agile, but at the same time prudent and responsive. In less than 3 years it has reached the impressive figure of 200 members, has participated in more than 100 events and has created 9 regular work tables around such relevant topics as digital identity, cybersecurity, digital credits, among others. Likewise, these grouping entities serve as a grounding pole for many entrepreneurs who need to validate their business models in the face of regulatory or market issues. For this reason, Colombia Fintech has become the meeting space for all aspects of an industry as broad as that of financial services, where insurers, banks, cooperatives, financing companies, sedpes, fintechs, networks, regulators and supervisors they have found a space to collaborate.

I invite you to enjoy Fintech Companies in Colombia. His challenges and achievements, a wonderful compilation of the Fintech industry in Colombia.

ANDRÉS ALBà N |

5

FOREWORD

JAVIER RAVENTĂ“S

DIRECTOR OF ACADEMIC AND INNOVATION JMR COMMUNICATIONS

The Fintech ecosystem has today become day in a very important sector in the different countries and especially in Colombia. We can say that there is a Fintech definition for before the Coronavirus and during the Coronavirus.

Before the Coronavirus, the country was seeing as large Fintech startups have been developing, growing and evolving.

So important have been its developments, that large investment funds are investing in different initiatives of Fintech companies in Colombia, we see cases as important as those of ADDI and Finsocial, which have obtained resources very important investment funds international companies, who have invested in companies very important worldwide.

During of this work we will know more about it.

Important companies began to develop, with different nuances, some focused on very specific niches such as Bankamoda and Finsocial, incorporating an additional element that is social inclusion, Bankamoda in the sector of clothing and Finsocial in the education sector and pension.

fast credits via Internet; ExcelCredit, who have developed a technology that responds quickly to continuous changes in the market and among its developments is Sara, a virtual assistant; Referencia, found a very important ally in Fenalco and began an important development with credits to the buyer in commerce; and ADDI, has initially developed a whole technology to offer credits directly in the point of sale, to fulfill the dreams of the people, but they do not imagine everything there is in this development.

Today that social networks have become in fundamental part of people, Credissimo became the first company in the world to launch on Facebook Messanger a fully automated credit chatbot.

Some companies have found a very niche interesting, how is it to help people who have some difficulty in their credits, This is the case of Resuelve tu deuda, which developed business models very useful today and that are allowing many people to return to credit life healthily.

Other very well developed payment platforms and structured, such as Puntopay, Puntored, that handle a very important number of transactions today in Colombia, helping small businesses and independent professionals with access to financial services digital.

We can enjoy how the great vision of a traditional banking was transformed and developed quite an important financial mega solution, how is the case of Daviplata, starting with a development in the SIMS of cell phones, allowing any Colombian from his cell phone had access to the financial sector very easily; today a great help for him government to be able to transfer the subsidies that grants very easily, quickly, reliably and safe.

We find companies with a core in credits where they have achieved that the entire process be digital, how we will see it in Rapicredit, which has granted more than 30 thousand

An item that I have found very interesting in this ecosystem is that of cooperation and that of doing co-development; ADL (Aval Digital Lab) is a clear example and we see it reflected through

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a group of young people professionals, very talented and creative who developed DALE.

companies find solutions liquidity through the purchase of your invoices.

We are going to discover a very interesting case of how an accounting services company has developed products and services that amaze across the region, is the case of SIIGO. Always up to date with each new resolution of the DIAN, services from the Cloud and now helping accountants with digital innovations, making their work easier and provided greater reliability and now integrating to accounting systems billing electronics that is already law in the country.

An entity that gives great support to Fintech, is the Chamber of Commerce of Bogotรก, through of a Financial Services cluster, working very hard to have Bogotรก as the third Latin American Fintech Hub.

Well-focused Blockchain technology, we will see with Beriblock and its important developments, that allow asset transfers digitally, maintain traceability, integrity and the inalterability of the documents.

Advancing in book we will see technology brought of science fiction movies and that today they are a reality; is the case of Olympia, with the digital identity, has developed a platform biometric, facial recognition and verification of identity documents.

We find companies already very consolidated internationally, such as Transunion, with very important developments to avoid fraud, with information solutions that allow to build trust to the different entities and consumers, with solutions that allow consumers to qualify for possible credits.

During Covid, we found that the developments in many cases they accelerated impressively, that many of the companies Fintech became great allies for the Government, companies, people in the whole country. We see how from the House of Commerce of Bogotรก, and from each of the Fintech companies in Colombia, the social factor has prevailed, the work team of the different companies, have evolved rapidly in create new products and services to support to all companies, government entities and citizens with the management of services financial, in an easy, safe and inclusive way.

We see how Fintech companies have come together to the Government in order to make payments of subsidies in the fastest, safest and most controlled, others helping companies buying your invoices so that they have liquidity, others with payment platforms, others offering credits quickly and above all, all supporting this situation to be bearable as far as possible. I hope you enjoy this book, as much as I do. I have enjoyed doing it.

We see how small and medium companies are very important for Fintech companies in Colombia and we found at Omnilatam, a fintech that allows entrepreneurs and small and medium

JAVIER RAVENTร S |

7

CHALLENGES FOR THE FINTECH ECOSYSTEM

ERICK RINCÓN CARDENAS

PRESIDENT OF COLOMBIA FINTECH

INTRODUCTION Traditionally, the financial sector has been an area almost exclusively for financial institutions, but the development of technology has allowed the emergence of new business models; specifically FinTech. Now, unlike the belief that Fintech was going to replace the traditional players in the financial system, these new business models are collaborating with the Bank; FinTechs contribute to the Bank's evolution, while these, with the support of the traditional financial infrastructure, achieve growth and a large number of clients.

From a digital payment system, digital loans, algorithmic trading, portfolio management, both for companies and individuals, high-frequency financial data exchange or roboadvisors, they have undergone a transformation due to the fact that Fintech companies have developed

8 | EMPRESAS FINTECH EN COLOMBIA

an «ecosystem» Digital about these services. In this way, the digital implementation at the head of Fintech companies is expanding to a broader context, in which its real value is not so much in the automation of particular business processes and services, but in the automation of the business itself.

While it is clear that technology can bring great benefits, there is still a long way ahead. Like all new technology, it represents an economically efficient alternative for investors of various kinds, and contributes to the development of financial markets, inclusion and the generation of social well-being; There are also some problems for a deep implementation in the territory and therefore, it is necessary to address the legal problems that its use raises.

CHALLENGES To develop the Fintech ecosystem in Colombia, we face a huge challenge: a large part of the Colombian population does not have broadband Internet - they cannot take advantage of the benefits offered by Information Technologies and Communications (ICT); and on the other hand, the lack of regulation - differential - brings uncertainty, both for Fintech companies, as well as for users. Regarding the first challenge, it is necessary to identify how much of the small companies in Colombia are not connected to the network, which leads to a lack of tools necessary for their development. Small and Medium Enterprises have great influence in the country, more often they are limited to the way they provide their service due to the lack of tools.

Therefore, greater Internet penetration and speed is needed. This would represent access to a greater diversity of information sources; study in virtual classrooms; new products, compare prices that the virtual world brings.

On the other hand, some Fintech segments need regulation that transmits security to users.

Having a regulatory base which indicates how the consumer is protected in digital channels, it is possible to demonstrate suitability in the service through the responsibility of those who design and program the algorithms, always seeking the greatest satisfaction of the client's interests and the elimination of conflicts. of interest. Common themes in the regulatory needs for all Fintech segments: Data Protection, Consumer Protection, Customer Knowledge, and Anti-Money Laundering tool.

In addition to the safety of users, the lack of regulation also entails a lack of incentive; Thus, for example, the current tax regime is one of the main determinants for businesses not to accept electronic and / or digital means of payments in Colombia. The foregoing, due to the fact that we have a tax withholding regime that generates a cost for businesses, which generates the lack of tax benefits and the risks of sanctions; in addition to encouraging a high level of informality and other fears, which do not contribute to the flow

of new digital businesses. On the other hand, a disincentive to one of electronic payments is the tax on financial movements (4 x 1000).

SOLUTIONS & COMMITMENTS Taking into account these challenges, one of the points is in the need for cooperation between regulators, supervisors and the Fintech industry; seeking to improve the ecosystem by creating trust in consumers. It is because of this idea of inclusion that we believe in the consolidation of a Fintech ecosystem which will continue to grow and consolidate, with important advances in regulatory matters, greater collaboration between the different actors of the ecosystem and new Fintech startups which result, as has happened. in recent years, in consolidating the country as one of the best in the race for innovation and inclusion in Latin America.

It is important to point out Article 333 of Colombian Constitution, which affirms the need for free economic activity, therefore, permits or prerequisites for its exercise may not be required without legal authorization. However, this does not mean that there cannot be a regulatory task for technology that allows or enables the development of new industries such as consumption, production and collaborative finance; more is a sign of caution when imposing a requirement, an excess of regulation threatens freedom and individual responsibility. Therefore, it is necessary to make the system more flexible with the creation of differentiated rules that adapt to the new models and can be integrated by the different participants; creating an inclusive regulatory framework that can count on permanent support from three types of actors: those who define public policy; Who regulate and finally Who supervise.

Taking into account the gaps that this industry faces, a blog that allows solving these regulatory asymmetries must take into account the following: First. Bearing in mind that this industry is based on consumer demand, financial education in Colombia is of vital importance, not only by private financial institutions but

ERICK RINCĂ“N |

9

also by public entities, and it should provide an attractive language for the population; the safety and confidence that the consumer is instructed are key factors when developing the ecosystem. Second. The innovative concept of a "Sandbox" needs to be identified to address these particular challenges.

Sandboxes offer innovative companies the possibility of operating, for a limited time, with a restricted number of clients, under conditions determined by the supervisor; leading to great incentives for new emerging business models as they can test products, services, and innovative technological solutions in a controlled environment. In the same way, for supervisors and regulators, it offers a valuable space to learn about how new sectors operate, evaluate if they need and how they should regulate areas not covered by rules, or modify those that can reduce the benefits of innovation. Third. Taking into account the previous point, the regulatory framework of this industry should not act reactively for the risks of fraud, money laundering and other vulnerabilities that may arise. This regulation must ensure the proper management and prevention of risks associated with financial activities; without ceasing to be sufficiently permissive in the face of the development of new technologies and business models, allowing them to evolve, adjust and mature before there is a regulation that limits them. Fourth. Taking into account that it is necessary to create an ecosystem of trust to the user, a storage of personal data is proposed, which must be encrypted with the highest encryption standards, or the storage of personal data in a decentralized manner with solutions built under the principles privacy design. Therefore, the entities that offer these services must ensure the transparency of the information to their

10 | EMPRESAS FINTECH EN COLOMBIA

users, the correct performance of the algorithms in terms of profiling, design, administration and protection against possible cyberattacks that generate vulnerability and distrust. in the system. Fifth. Finally, it is important to bear in mind that, when imposing these requirements on collaborative platforms, you should take into account the nature of the activities to which they are engaged and of the business models, without favoring one over the other and distinguishing between the platforms that provide the service, those that act as mere intermediaries as well as between individuals who provide services on an occasional basis. Collaborative finance also needs regulation, but one that allows balancing innovation with legal certainty.

We should be happy that Colombian Fintech ecosystem is one of the most important in the world, being in the top 40 countries in the world.

This reflects the continuous work for development throughout the sector that integrates: Digital Credit, Electronic Payments, Crowdfunding, Factoring, Insurtech, Regtech and even reaches Blockchain and Cryptoactives. Colombia Fintech has consolidated its position as the third largest Fintech hub in Latin America Taking into account the above, Colombia should increase its efforts to adopt or create legal frameworks that influence technology design, increasing incentives and confirming obligations, but including appropriate liability rules for integrating these new product and service providers. Even so, it is important to note how this ecosystem continues to grow and consolidate, with important advances, greater collaboration between the different actors in the ecosystem and new startups that consolidate the country as one of the best in the race for Fintech innovation in Latin America.

FINTECH FIGURES IN COLOMBIA, ASOCIACIĂ“N COLOMBIA FINTECH

Colombia Fintech publishes this article in order to identify the development of new technologies in the financial system, learn about the evolution of the Fintech ecosystem, analyze the different business models and map the new disruptive technologies that are impacting the world; In short, it specifically examines the state of the financial innovation startup sector.

In the first place, it should be noted that the Fintech ecosystem in Latin America and the Caribbean is in a stage of great development, with important advances in regulatory matters and collaboration between the different actors of the ecosystem.

In recent years, the region has become an attraction for both investors and financial

institutions, leading to growth of over 60% throughout the region. For its part, the Colombian Fintech ecosystem is one of the most important in the world, positioned in the top 40 of countries in America with ecosystems for the development of Fintech companies. On the other hand, within the region, it is ranked as the third most important hub, due to the fact that 200 new companies have been identified with 50 new Startups consolidated in the last year; obtaining a growth of 26% in the last year.

The Fintech companies in the country have demonstrated continuous work for development throughout the sector, consolidating their position as the third largest Fintech hub in Latin America, behind Mexico, with 441 startups, and

ASOCIACIĂ“N COLOMBIANA FINTECH |

11

Brazil, with 377 startups. In the same way, the Colombian ecosystem has a great development compared to other Latin American countries such as Argentina (133 startups), Chile (112 startups), Peru (57 startups) and Ecuador (34 startups). Regarding a vision by cities, Bogotá is one of the most important in Latin America.

Currently, 67% of companies are based in the country's capital, followed by Medellín with 18%, centralizing Colombia's Fintech growth and innovation in these two cities according to the latest Finnovista report. Bogotá has a size of 85% of the financial sector with banks such as Citibank, Scotiabank, BBVA, Santander, Itaú, BNP Paribas, among other world-class banks; Therefore, it is not surprising that 67% of FinTech companies are in this city and therefore it is ranked third in Latin America for the development of Fintech companies, after Sao Paulo and Mexico City. On the other hand, other cities in Colombia have had a Fintech development such as Barranquilla 3%, Cali 3% and other cities 8% according to the Finnovista radar. On the other hand, it is necessary to identify that the Colombian Fintech ecosystem has become the vehicle to achieve financial inclusion, because it has contributed great value in the empowerment of women through the creation of solutions with a gender perspective; Colombia tops the list of countries with a higher proportion of Fintech companies in which there is at least one woman in the founding team, which represents 50% of this type of companies in the country. Now, within the Colombian Fintech ecosystem, currently two groups of segments can be identified, the main segments and the emerging segments. Regarding the main segments and how their growth has been compared to recent years: Regarding the segments, Loans is the leader for the first time in the offer of Fintech services, with 48 startups covering almost 25% of the sector. Followed by Payments and Remittances with 43 startups, it already represents 22% of the market, while the Business Technologies for Financial Institutions segment has 27 startups and accounts for 14% of the ecosystem. Also noteworthy is the Business Finance Management segment with 25 Fintech solutions and 13% of the ecosystem.

Among the segments with the most traction, ETFI stands out, which has grown 80% from

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15 to 27 startups; followed by the Segment of Score, Identity and Fraud, with 40% growth after identifying 14 startups, 4 more than in the previous edition. In the case of the Loans segment, both for consumers and for businesses, this has gone from 36 to 48 ventures, with a growth of 33%.

Taking into account the above, even when there are strongly consolidated segments such as loans, these new segments such as Business Technologies for Financial Institutions (ETFI) are also gaining strength in the ecosystem.

One of the factors for which there has been an exponential increase in Fintech businesses is in the use of emerging technologies. Thus, the Fintech ecosystem has not only focused on the feasibility of creating or implementing certain existing models in Colombia, but new models based on innovations such as “Robo-Advisors” are being promoted through the implementation of new emerging technologies.

Another factor highlighted by the latest edition of Finnovista's Fintech Radar refers to the financing of startups in Colombia. 61% of the enterprises in the sector have received external financing, an indicator that shows the level of confidence of investors in the Colombian Fintech market, and which has been maintained over the last few years. Comparing the 2019 data, when 58% of startups indicated that they had received external financing, we see a growth of three percentage points in 2020. Likewise, it should be noted that Fintech companies are contributing to strengthen the different sectors of the country, in terms of job creation, reflects the key role that Fintechs currently play in Colombia, as the sector creates more than 7,000 jobs in the country, with an average of 34 employees per startup. This statistic is similar to that of Mexico, which has an average of 32 employees per Fintech. In addition, we categorize the Colombian ecosystem as mature according to 71% of the enterprises are in the Growth and Expansion phase or Ready to Scale.

Additionally, Big Data & Analytics technology has begun to have a great place, being part of 46% of Fintech businesses. Another great boom within emerging technologies is cloud computing,

which is used by 44% and is expected to grow exponentially in the years to come. On the other hand, cryptography & Blockchain has been on the decline compared to recent years, being used only by 14% of Fintech companies. Finally, another great emerging technology will be Artificial Intelligence or Machine Learning, which is part of 14% of Fintech companies and is also expected to begin to boom in the coming years.

Now, it is important to emphasize that the Colombian Fintech ecosystem is under development and therefore only 3% of Fintech companies are more than 5 years old; Like the Fintech companies that are between 4 and 5 years old. Even though the percentages are not large, it is important to emphasize that 39% of Fintech companies are 3 to 4 years old, this data being very important, as it identifies the strength of the ecosystem in maintaining the companies.

At the same time, it is emphasized that 55% of startups are not older than two years, which identifies an impulse that the ecosystem has created for the creation of new startups in recent years. Even though a solidity and momentum has been identified for these new companies, startups identify great challenges. The four main challenges are: 18% of Fintech companies generate key alliances with traditional players; 17% identify regulatory risks; 16% say that a big challenge is taxes and finances and lastly, 8% sales. On the other hand, it is important to

identify the regulation. This is due to the fact that Colombia does not have a specific regulation for Fintech companies and more than 40% of FinTech companies believe they need one. Now, this does not mean that there are no rules about it; But this does not mean that it is enough for this era of great Fintech boom. Another point to mention is the approval of the Clean Slate bill, as the country's Fintech companies face a great challenge as this measure would slow down the possibility of expanding solutions to populations and segments where the traditional industry does not reach, because by not have its own robust databases, they would not have visibility of the behavior of the holders in the financial sector to be able to make assertive decisions. In conclusion, the Fintech ecosystem in Colombia continues to grow and consolidate as great advances have been identified in issues such as regulatory matters, Inclusion and gender perspective and new emerging technologies; As well as points to improve, such as the lack of regulation or incentives to finance the new Fintech projects, have been examined. In summary, the Colombian ecosystem continues to develop, it is more possible to affirm that it is on the right track, since it is consolidated as one of the best countries in the race for Fintech innovation in Latin America and in the world.

ASOCIACIĂ“N COLOMBIANA FINTECH |

13

THE FINTECH, NEW ALLIES IN THE ORANGE ECONOMY IGNACIO GAITÁN

INNPULSA

The world is going through an era where creativity and culture are becoming key actors for the economic and social development of countries through their different expressions and formats; Colombia is no exception to this trend and, in fact, it is betting big on the development of this sector as a transforming agent for the coming years.

However, these so-called “Orange Economy” industries face different challenges, many of them related to the formalization and access to financial services, a key point in the development of their business and sustainability models.

Colombia ranks third in Fintech activity on the continent above countries like Argentina, Chile and Ecuador, which means that there is an interesting portfolio of options that can be adjusted according to the solutions that they demand. This Fintech ecosystem in the country is led by actors such as Finaktiva, Mesfix, Sempli, Gulungo, a2censo, Pimes, Bankamoda, who have changed the way of doing business and accessing financial services in the country, with a special focus on entrepreneurs and microentrepreneurs in the country.

This is where the ´FinTech´ comes in, a concept that refers to the modernization and innovation of financial services through new technologies, applications, models and processes; But what is the value of these initiatives for orange entrepreneurs? The answer essentially is that they propose disruptive solutions to your finance challenges with non-traditional solutions. Fortunately for Colombian creative entrepreneurs, according to the Inter-American Development Bank (BID) in its report "Fintech in Latin America 2018: growth and consolidation",

“Fintech companies are taking over the world of financing with special solutions tailored to entrepreneurs. As citizens and as a Government, we must understand their importance in the economic development of the country and their role in the financial fabric, where they become complements and allies of traditional banking and a response to the challenges that our microentrepreneurs face every day ”, stated Ignacio Gaitán Villegas, president of iNNpulsa Colombia.

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For example, Finaktiva offers flexible financing services for high-impact entrepreneurs, totally online and in just three steps. In the same way, they offer knowledge spaces and tools to connect them with the entrepreneurship and capital ecosystem.

Another important actor, especially for the creative and cultural industries of the country, is Bankamoda, an alternative bank for companies in the fashion sector founded in 2017 and which offers specialized services such as working capital, advance invoices to strengthen liquidity, insurance adjusted to business model and credits for modernization of equipment and machinery, and all this without paperwork and totally digital. Now, on a different shore we have a2censo, the first crowdfunding community (collective financing) in the country where entrepreneurs who are already in operation will be able to apply their projects to receive financing from Colombians who wish to invest figures ranging from $ 200,000 pesos in their favorite campaigns in a win-win relationship: the entrepreneur receives financing and the investor receives a return on capital + interest, fully online and with the support of the Colombian Stock Exchange together with other entities such as iNNpulsa Colombia and Bancoldex. These represent just one example of some of the services that entrepreneurs in the country could access when approaching the different Fintech solutions that are available in the country; There are also platforms such as Colombia Fintech (Association of Fintech Companies of Colombia) that group lists of entities that provide these services in Colombia.

THE FINTECH ARE GROWING Although in Latin America there are still some regulatory challenges for the birth and strengthening of Fintech, the reality is that this trend continues to gain strength throughout the world. In fact, between Finaktiva, Mesfix and Sempli, all Colombian Fintech companies, managed to raise more than $ 13 million dollars in investment rounds, thus confirming the value of this type of solutions for the Colombian market and Latin American. In the second edition of the same report carried out by the BID and Finnovista, it is highlighted that, despite these positive data, there are still divided opinions regarding the regulatory issue in Latin America, since 46% of Fintech companies consider that there is a strong openness to dialogue by regulators towards the Fintech industry, while the other 48% consider that this predisposition to dialogue is still very weak. Despite this perception, it is evident in this report that the regulatory system has made significant progress in the region, beginning to develop initiatives and maintaining a dialogue that fosters the search for a favorable framework for innovation and the birth of new financial solutions. In particular, Colombia must continue to support this type of initiative that is providing more and more options to sustain and strengthen Colombian entrepreneurs, especially those from the orange economy, so that they have a greater portfolio of alternatives that allow them to consolidate their business models. deal.

IGNACIO GAITĂ N |

15

“FINTECH WAKE UP BANKING AND RENEW IT.

IT IS THE INNOVATION ENGINE THAT DEMOCRATIZES FINANCE " PABLO GRACIA BETORZ

ELATAM DIRECTOR, LLEIDA.NET

I love this phrase, it is possibly the one I like the most of all the ones I have read, since it reflects the ability of the Fintech world to transform the industry and the lives of people. The Fintech world is no stranger to the problems of the traditional banking sector when it comes to making remote transactions, 100% digital. That is why they share problems (and solutions) when it comes to signing contracts at a distance and the onboarding processes (enrollment, in English KYC) in the digital world. The Fintech world is born digital and interacts with its clients remotely, immediately and digitally, so a trusted third party is needed to certify the communications between the company and its clients, so that certain objectives are met objectively. attributes to safeguard the interests of both one party and another.

How many times have we heard the phrases: "I did not sign those documents", "I did not know that this clause existed", etc., in cases like these, it is necessary to have a support, digital evidence or certification from a trusted third party that allows trust or have legal security in case of any subsequent controversy. Electronic communications and electronic signatures must comply with two important regulations in Colombia: Law 527 of 1999 called the Electronic Commerce Law and Decree 2364 of 2012 that establishes part of the regulation of the previous one, complementing the legal framework of authentication and Electronic signature. From this decree, the electronic signature in Colombia has legal recognition and an alternative scheme to the digital signature, so it is convenient to be clear about two main sections since both can be used in the Fintech world: The digital signature: It has the investment of the burden of proof 1 in

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case of legal problem, is that which is signed with a digital certificate that can only be issued or granted by a certification authority (CA) entities supervised by the Superintendency of Industry and Commerce and accredited by the ONAC National Organism Accreditation. They are highly reliable, however, their processing, issuance time, cost and difficulty of use are greater.

The electronic signature: They are the best known and most used signatures on the market, they are usually methods that allow identifying _____________ 1 Who is obliged to prove a certain fact in court. According to the foundation of the onus probandi it is expressed that normal is understood to be proven, abnormal is proven Âť

a person in relation to a data message, such as an OTP key by SMS or Mail, QR codes, cryptographic keys or a signature handwritten on a screen that collects some biometrics, for example. Although this type of signature does NOT reverse the burden of proof, it does have legal validity, and has advantages such as its easy and fast acquisition, low cost and high usability and a better experience of client. But what exactly does the law say? As we said, in Colombia both the digital signature2 and the electronic signature are regulated by Law 527 of 19993, which specifically says that the electronic signature must comply with: 1. A method has been used to identify the initiator of a data message and to indicate that the content has been approved.

2. That the method is both reliable and appropriate for the purpose for which the message was generated or communicated. In addition to this law, Decree 2364 of 2012 establishes the regulation of Law 527 in article 7 and incorporates: 1. Define the criteria of reliability and appropriability.

2. Set the differences between digital and electronic signature, 3. It establishes the use of electronic signature by agreement between the parties and also establishes that the bodies with authentication mechanisms have to guarantee authenticity and integrity.

4. Electronic signature security mechanisms with third-party technical audits. At this point, let's talk about usability.

But which of these electronic signatures should we use: The digital signature is very very secure, as it is the only signature that can be equated to a handwritten and face-to-face signature, but it has the handicap of having to obtain a certificate in person, at the offices of a CA or at the address provided by the solicitor. The electronic signature that also has legal validity, although it does not reverse the burden of proof but is more "massive" since it does not need physical presence to issue any certificate and is almost immediate, this

leads to a better user experience or less friction and It is useful for non-contact procedures.

Public entities and private companies from all economic sectors need to carry out innovative digital transformation processes to survive and differentiate themselves and grow, which allow the procedures and transactions with their services to have better experiences for their end user, mitigating or reducing the risks of communication, such as identity theft, alteration of evidence, rejection of agreed commitments, etc., among others. Faced with this problem in terms of firms, we must weigh what is the particular need of both entities or companies and these in turn the needs of their end users, which will ultimately be the parties in agreement of wills and what is the objective of growth, efficiency and profitability, user experience to adopt one type of firm or another. The customer experience has gradually incorporated in recent years issues such as the non-use of paper, mobility and now the lack of presence for the request and delivery of services is on the rise. To take a step forward in the identification of people or knowledge of the client in the digital environment, the onboarding or Know Your Costumer (KYC) processes arise, which are the processes by which a Non-client (future client) makes a process of identification so that a company or entity can validate that identity and end up signing a contract so that that future non-client makes a conversion process or becomes a client in the shortest possible time, doing the process remotely and complying with the law valid.

Stages or characteristics: 1. Identification through electronic means. With their respective queries to different lists.

2. Authentication: It is to give a person an authentication credential so that person can access a product or platform, consent to documents or procedures.

3. Electronic signature of documents.

I have to say that in Colombia there is an “ally� that in Europe and other countries does not exist in the authentication models, which is the National Registry of Civil Status RNEC where you can go to consult both the ANI database and the biometric _____________ 2 ARTICLE 28. LEGAL ATTRIBUTES OF A DIGITAL FIRM. ARTICLE 28.

LEGAL ATTRIBUTES OF A DIGITAL FIRM. 3 ARTICLE 7. SIGNATURE

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fingerprints. What onboarding processes are there in the market: Well at this point, as in the electronic signature, we must opt for the process that provides us with more compensation in Risk VS Business, knowing that some of the current processes are:

4. Integrity of the identity document: Analysis of the reliability of an official document such as identity card, passport or driver's license.

5. Consultation of the ANI database and comparison with the data of the ID code. 6. A mix of all of the above.

1. Fingerprint biometrics: For me the safest process on the market, but with the handicap of having a fingerprint device nearby that meets certain requirements and has been authorized by the RNEC, thus reducing the possibility of making many registrations remote, using a smartphone for example.

2. The challenge4 questions: It is a mechanism that asks us questions about our credit and financial history, as an authentication mechanism.

3. Facial biometry: Process that compares our current face with the face of the identity card or of another document.

But what would it seem to us if there was onboarding for behaviors or even with Blockchain? The answer is that we already have companies in the Fintech industry in other parts of the world doing this kind of thing ... And it is that Fintech companies require a model that covers all mobility because we are talking about the use of totally remote means and we need a solution that allows verify identity through mobile devices. Obviously there are different levels of risk depending on the business model.

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_____________ 4 Concept 2014111116-001 dated January 7, 2015 SFC Superintendency Financial of Colombia

For example, when we raise money the level of risk is low. But when we lend money, the risk tolerance is much lower and we must have a very exhaustive onboarding system that allows us to reduce the percentage of error in customer identification to the maximum. For example, a company that is dedicated to raising money from citizens is not the same as a company that is dedicated to making loans to companies or individuals to reach the end of the month.

This is the type of onboarding or 100% online enrollment.

1. A client is registering with a Fintech and fills in a form 2. That client, once the form is filled out, begins a process of video identification, proof of life (blink, smile, etc.).

3. Getting a "selfie" or selfie.

4. Photo of the ID in front.

5. Photo of the identity card back.

At this moment, the data of the person, the facial biometry of the “selfie” versus the photo of the ID, is validated, the barcode of the ID is taken and validated before the Registrar, and it could go through a consultation lists for SARLAFT5. In addition, by OCR the data of the identity card are being captured and reflected in a contract that we have built with the data of the form. We can also ask the user to upload documents such as income, the latest payroll and send all that information by OCR or ICR to a credit factory for a 100% digital scoring and at the moment for an amount to be authorized online.

risks in onboarding, the first rule of which was a circular 007 of 1996 that basically spoke of a financial enrollment where it required the handwritten signature in person and fingerprint referring to that which places in ink. Obviously, as everything has evolved and other products and services have been arriving in the bank itself, since circular 055 of 2016 the SFC already allows an electronic SARLAFT and an electronic KYC and, most importantly, it already tells us about a non-mandatory face-to-face interview.

Also noteworthy is circular 042 of 2012, which speaks of resounding identification mechanisms, facial biometrics and tokens generated by OTP. Finally, circular 029 of 2019 of the SFC also shows progress by allowing authentication to be carried out with facial features or digital mechanisms on mobile phones. All this so that the shortterm challenge is for both citizens and Fintech entities to reduce the problems of spoofing and let's make this ecosystem the most possible insurance in matters of transactions.

Thanks to: Giovanni Silva.

Erick Rincón

5. Once everything is "OK" or validated, the contract is signed by electronic signature.

In less than a minute we have gone from NO client to client complying with all the regulations since we have used more than 2 authentication factors. Logically in this case, the Financial Superintendency has constantly been seeking to prevent, mitigate and eliminate _____________ 5 Risk Management System for Money Laundering and Terrorism Financing is a mechanism developed by Banco de la República to comply with Basic Legal Circular 029 of 2014 of the Financial Superintendence of Colombia.

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DIGITALIZATION FOR FINANCIAL INCLUSION AND SOCIAL,

CAROLINA VÉLEZ FINSOCIAL CORPORATE MANAGER MEMBER OF THE BOARD OF DIRECTORS COLOMBIA FINTECH (2019- 2020)

10 years ago I had the opportunity to work with one of the most representative and solid economic sectors of the country, the floriculturist, but the biggest challenge was to focus on the inclusion of the sector at all levels, not only because I worked for small and medium floriculture, but also because it did so with a group that had to face and compete with the largest and strongest in the environment (rose crops) to reach international markets with their novelty varieties, among which we sought to impact Europe and Asia. The purpose was achieved with union support, national government entities and above all due to the rising trend of the dollar. Today, many of these companies are robust, job-creating companies that impact their communities and that in turn have implemented important technologies to continue their growth and consolidation both in operation and marketing. Currently I find a similar case between banking, FinTech companies and each of the actors. In recent years, the landscape has been defined by disruptive digital technology transforming financial services.

Industry companies have successfully filled the gaps left by existing large financial institutions to meet changing customer needs and achieve strategies to ensure profitability. This in order to be accepted as new business models called startups and consolidate new markets. Now when we talk about digital transformation and financial inclusion, terms that seem to be a fad, but are actually part of the DNA of each of the companies that make up the FinTech ecosystem, we understand digital and new platforms or developments such as the revolution of society whose initiatives should invite companies to a new model of culture. To the extent that they are focused on digitization for inclusion, they look

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after the interests of their clients and provide a benefit to the target market by being closer, more agile and timely; This is the case of FINSOCIAL, a financial company supported by technological solutions whose purpose is to keep things simple in order to achieve as many transactions as possible, always with the premise that money is in people's lives. In this we seek to be number one.

To learn a little more about the purpose of this novel and attractive financial model, we highlight two generations, millennials and centennials, who set the standard in the use of FinTech, not

being the only generation that companies want to reach and therefore they face enormous challenges for the coming years. By working closely with public teachers and pensioners, mature clients and who in most cases have had few opportunities to access technological advances, we find that it is their relatives (children, nephews, grandchildren) who apart from being the In many cases, the beneficiaries of the loans are the ones who understand and manage technological issues, make decisions, and therefore we implement financial education support in them with different institutions.

According to data from the Superintendency, the financial inclusion indicator by age ranges shows that those with the highest participation are Baby Boomers with 89.1%; followed by millennials with 87.7%; then adults over 65 years with 77.5% and lastly generation Z. According to the Fintech report, innovation at the service of the client of the Observatory of Financial Digitization, FinTechs have been catalysts of digitization in financial institutions and in society under

the following assumptions: innovation at the service of the client, democratization of financial services and inclusion financial At present, both FinTech companies and banks consider that their collaboration is the best way to generate benefits for both parties, hence the unions such as Colombia Fintech take a fundamental role of integrators "FintechgraciĂłn", to continue Progress towards open banking business areas defined as an open banking model that seeks to give more control over data to consumers who end up being the most benefited in the chain. In addition to this, new players appear, such as crowdfunding that through collective contributions from a group of people financially support a project to receive an interest or a percentage in society. The main competitors of the Banking-Fintech alliance are the technological giants: Google, Apple, Facebook, Amazon, among others worldwide, which are the Asian Ant Financial commercially called Alipay, which has the trust of millions of users and large funds for your investments; The latter being the most complex of the challenges faced by new

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companies or startups, especially those that are not regulated in the financial sector and for which acquiring or accessing resources for their operation is complex due to the high costs, the trust that they must achieve with international funders, but above all because they must have a social purpose. One of the most representative benefits for the end user in the role of FinTech is financial and social inclusion, since the arrival of these new players has allowed the system to improve coverage and access. In the last 10 years, there were 12 million Colombians who became banked, so the inclusion indicator went from 55.5% in 2008 to 81.4% in 2018, according to the Financial Inclusion report of the Superintendency. This means that of the 34 million adults in the country, 28 million had access to a financial product. However, there is still a latent challenge and a broad terrain, which FinTech can reach: to include 6.3 million adults, 18.6% of the population of legal age in Colombia.

In order to continue with the inclusion activities and the tasks of the techno-financial sector, it is important to make prevail commercial

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relations with the different entities with which companies and clients interact, such as banks, payment agencies, financial allies, collaborators, suppliers, the unions, the regulatory system and official entities. We are facing an unprecedented innovation, an example of how banks and businesses from different economic sectors work together to provide a better user experience where both complement each other; While the small ones launch their agile products towards specific niches such as SMEs, the large corporations seek to captivate those markets by providing more solid structures that generate trust and security for the client in order to adapt to new industries, all focused on transactional channels. However, the future development of FinTech in the country will largely depend on the regulations implemented by the competent authorities. The challenge is to maintain balance and neutrality between traditional financial institutions and new startups in such a way that innovation is promoted, financial stability is preserved and customer protection measures are established.

REGULATION, FINTECH FELIPE LEGA

INTRODUCTION Innovation and the use of technology have changed the way financial services are demanded and offered in the world. Users are looking for channels and products that are entirely digital, which allow them to be accessed in an agile way, at any time and place. On the supply side, two important trends are evident. On the one hand, traditional entities seeking to transform their offer to focus on the needs of their clients and increase their operational efficiency, and on the other hand, the emergence of new Fintech agents, whose operation is based on technology and specializes in a certain activity, financial product or process (FSB, 2017).

The potential of this trend to advance in the deepening and efficiency of the sector, as well as to strengthen the design and commercialization of its products and services is clear. However, innovation brings with it significant challenges by encouraging the atomization of business models, potential regulatory asymmetries, and financial

URF

disintermediation that can enhance traditional financial risks. Along these lines, several international organizations have prioritized the digitization of financial services, as a tool for the development of inclusive financial systems (G20, 2016) and an opportunity to advance on other policy fronts such as formalization (G20, 2018).

At the same time, they have highlighted the need for regulation to maintain a playing field without arbitration, with clear rules to manage risks and ensure financial consumer protection (FSB, 2017).

Colombia has been making progress in this line. First with the creation in 2015 of electronic deposits, the collaborative financing activity (crowdfunding) in 2016, later in 2017 with the simplification of the requirements for opening passive products, in 2018 with the development of the advisory activity in the stock market and the authorization of credit institutions to make Fintech investments. Recently the regulatory agenda has focused on streamlining electronic transactions, for which work is being done on

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adapting the regulation of the low-value payment system, digital identity and open banking (URF, 2019).

Financial Inclusion Strategy was established, adopted in 2016 by the Intersectoral Commission for Financial Inclusion.

At the same time, the National Government has strengthened the tools of the financial authorities, in order to increase their capacity to react to changes in the markets, identify new sources of risk and generally have an adequate institutional framework to accompany the financial transformation. The sandbox regulations currently being worked on and the definition of the Fintech principles of the Pacific Alliance are an example of this.

In this context, the URF created the Fintech Subcommittee and from there it has generated private public discussion spaces on topics such as: digital identity, crowdfunding, digital payments and regtech, among others. In general, in Colombia, regulation on Fintech issues has been based on the activity-based approach that seeks to define the operations, entities and regulatory standards with which the industry should develop, without losing the flexibility to recognize changes or new activities, according to market dynamics warrant it.

CONSIDERATIONS ON THE FINTECH REGULATION Recognizing that the rapid development of the Fintech industry brings challenges that may to enhance financial risks, Colombia has accepted the recommendations to adopt a progressive and proportional regulation that facilitates innovation while maintaining financial stability (IOSCO, 2015).

The foregoing, taking into account that the Colombian State has established inclusion and financial deepening as a primary object of interest in the long term, which around the world have been achieved through the intensive use of technology in the provision of new channels and products to the population, respecting the guiding principle of financial consumer protection and equal operating conditions for financial entities that have transformed their offer of products and services towards digitization and new players in this market.

This proposal follows a vision of joining forces between sectors of the economy, which implies opening the doors to new players to complement traditional financial schemes, based on a high technological component and disruptive business models, taking into account that the entry of new participants it raises competition in the sector and also makes it possible to expand and innovate the offer of financial products and services. With this policy vision, the National

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FINANCIAL INNOVATION IN COLOMBIA Today, Colombia is the third country in the region with the highest number of Fintech ventures which have permeated all financial activities and processes, a phenomenon that has been accompanied by the acceleration of innovation processes in incumbent financial entities (Anif, 2018) .

The National Government has promoted the construction of a regulatory environment conducive to change, that is, one that allows taking advantage of the benefits of innovation and technology, maintaining in all cases financial integrity and stability and due consumer protection. Under this approach, standards and principles have been developed that tend to generate an environment of greater competition by having treatment rules established by risk.

The commitment to the regulation of innovation for financial activity began in 2015 with the definition of regulations for electronic deposits as products for the population to make payments and transactions safely, the construction of information records that would later allow transit to other financial products such as credit and thus increase financial inclusion.

In 2017 and in response to one of the most developed areas in the world, the URF began

a regulatory project to establish crowdfunding in Colombia, as an outstanding mechanism for its potential to expand sources of financing for small and medium-sized companies. (SMEs).

Under this approach, the National Government issued Decree 1357 of 2018 by means of which collaborative financing is regulated as a new activity in the stock market, following a simplified standard, so that these issues will not constitute a public offering of securities or require registration in the National Registry of Securities and Issuers - RNVE. Through the regulated scheme, productive projects may be financed for up to 3,000 SMLMV and up to 10,000 SMLMV and contributors may allocate up to 20% of their annual income or equity in this type of financing in the case of unqualified investors. On the other hand, in 2018 the interest of the traditional financial sector and the Fintech industry was gathered to make alliances to generate benefits for their current and potential clients. As a result, in December 2018 Decree 2443 was issued, through which credit institutions are authorized to invest capital in innovation companies.

Also in 2018, within the framework of the creation of consultancy as a stock market activity, through decree 661, the use of technological tools in the relationship with the client was authorized to carry out the aforementioned activity, in order to to open spaces for innovation in contact between securities intermediaries and investors, as well as to generate efficiencies in the execution of advisory services.

Subsequently, the URF proposed to update the regulation of the low-value payment system 13 years after it was issued. The foregoing with the aim of generating greater security and agility in transactions and facilitating financial inclusion as it allows to replace typical scorings with payment histories and to promote the formalization of monetary operations in the Colombian economy.

This review aims to adjust the activities of the payment system to the new context, boost the access of new players, expand cost transparency and define interoperability standards. The construction of this comprehensive reform was undertaken hand in hand with the industry and with the support of the Banco de la RepĂşblica and

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the Financial Superintendency, understanding this initiative as an opportunity to lay the foundations for a new financial infrastructure that will serve as a highway for the new digital economy.

The decree resulting from the process that began in 2018 with the publication of the diagnostic study and the subsequent holding of workshops and meetings with the industry to analyze barriers and prioritize regulatory adjustments is in the comment stage with the industry.

Additionally, the regulation of the possibility conferred by the National Development Plan Law to create the regulatory sandbox was included in the 2020 regulatory agenda, so that both supervised financial entities and any commercial company can test financial models and products in a controlled environment. This initiative complements the efforts that have been being made since regulation by the URF and those of the Financial Superintendency to accompany financial innovation through innovative supervisory methodologies.

On the other hand, this year's regulatory agenda will focus on two fronts. The first of them focused on the regulatory adjustments necessary to adopt an open data architecture, which promotes new financial developments while preserving the security and integrity of consumer-based information. In the second, the possibility of implementing a standard for account portability will be evaluated, in order to provide financial consumers with the possibility of keeping their account number and the information related to it regardless of their service provider, which will in turn, it encourages competition within the sector, since it will be easier for the consumer to link with the financial institution that, in his opinion, has the best offer.

To conclude, it is worth highlighting the existence of a commitment by the National Government to strengthen an environment conducive to the development of new products and services that have emerged as a result of the accelerated pace of technological innovation. This effort of course has borne fruit to the extent that this

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environment is used by all the actors that are part of this great innovative ecosystem that we are consolidating in our country. The challenge we all have, of course from each of our roles, is to ensure an ever greater growth of said ecosystem, maintaining the aforementioned principles of stability and resilience, while obtaining the great advantages of adopting the new ones.

Technological developments on all fronts: financial inclusion, efficiency, competitiveness, access to funding sources, etc.

Bibliography ANIF

(2018). Servicios Financieros Digitales: Resultados de encuesta piloto para Colombia.

Decreto Ăšnico 2555 de 2010.

FSB (2017) Fintech credit: Market Structure, business models and financial stability implications. Committee on the Global Financial System.

IOSCO (2015) Crowdfunding: 2015 survey responses report. FR 29.

URF (2017) Estrategia Nacional de InclusiĂłn Financiera.

URF (2018) Estudio sobre los sistemas de pago de bajo valor y su regulaciĂłn. Disponible en www.urf.gov.co

NEOBANKS: CHALLENGES AND EXPECTATIONS

FROM THEIR ENTRY TO COLOMBIA LAURA TOVAR

FINTECH EXPERT CONSULTANT

With a little lag compared to the rest of Latin America and the world, the Neobanks finally arrived in Colombia. New national players such as Lulo Bank and soon international players such as Revolut and Nubank join the list of Neobanks that until now led Daviplata and Nequi, who entered the list since they were transformed from digital wallets to Neobancos with the incorporation of products to your portfolio -credits and other services-. Neobanks are fintechs that offer banking services only through digital channels. They lack physical branches and are oriented to satisfy, to the measure, the needs of the clients. They offer as main premises of value, user experiences more pleasant and friendly than those of traditional banks, zero costs for services, agility in procedures, among others, all of which can be offered thanks to the benefits of technology, to data analytics and the bad reputation of financial institutions. The Neobanking boom has been increasing since 2014.

It is estimated that, during 2019, in the world, Neobanks received more than US $ 2.5 billion of investment, leading to significant growth in this industry. In the United Kingdom, Revolut, the third most representative Neobank -after the German N26 and Monzo-, showed a growth rate of more than 200%1. Indeed, during the last half of 2019 Revolut connected more than 5 million customers, reaching 8 million customers at that time. For its part, WeBank, the largest private Neobank in China belonging to the WeChat family, has linked more than 100 million users between 2014 and the end of 2019 with the particularity that all these new users are people who previously met unbanked, becoming the main engine of financial inclusion in that country, which still has a high rate of unbanked2.

In the United States, Chime, one of the largest Neobanks in that country, already has more than 6.5 million clients, which have been obtained in less than two years3.

Colombia is a very attractive country for Neobanks, because it continues to be a country with very low levels of banking, with a very high penetration of smartphones, a rate of adoption of new technologies and financial services offered by digital channels that are ranks above the world average, a concentrated market with few players, financial institutions with a bad reputation and an economy still based on the use of cash, all of which means that, at first glance, the country has several elements that They favor the rapid development of the market and the growth of _____________ 1 Taken from: https://thefintechtimes.com/why-neobanks-are-ontherise-and-selecting-the-right-account/ 2 Taken from: : https://go.forrester.com/blogs/webank-is-drivingfinancial- inclusion-at-scale-in-china/ 3 Taken from: https://www.businessinsider.com/vcs-investingchallenger-banks-monzo-chime-varo-revolut-n26-2019

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this type of business. Despite the benefits of the Colombian market, Neobanks, and in particular foreign players, are going to have to face several challenges when entering the country. To begin with, many of the world's Neobanks operate without a financial license, leveraged on the flexibility of financial services regulation that have reached the different countries accompanying the technological revolution (such as regulatory sandboxes) or leveraged on the possibility that entities unmonitored are issuers of electronic money.

Unlike what happens in some countries, to operate in Colombia they will require a financial license (either from a bank or from a financing company in case they are interested in attracting resources from the public and granting loans, or from a company specialized in electronic deposits and payments -SEDPE-, in case they only intend to attract resources from the public and be issuers of electronic money and prepaid cards) which puts a high barrier to entry into the Colombian market.

As an alternative to obtaining the license, new players may choose to leverage a traditional

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player's financial license, which is a very attractive scenario for incumbents, especially for those that still have legacy platforms to strategically ally with some of these players that can accelerate their transformation and insertion process in the digital economy.

Successful examples of this type of strategic alliance between incumbents and Neobanks can be found in the United States with GoBank, the Neobank that results from the union of Walmart with Green Dot Bank, with SimpleBank, the BBVA Neobank in that country and in India. with Digibank, the DBS Bank Neobank, among many others.

Likewise, the business models of some of the most successful Neobanks in the world are characterized by having a single product on the market. As an example, Nubank -the Brazilian neobank founded by the Colombian David VĂŠlez- offering credit cards either to UalĂĄ -the Argentine Neobank- with its prepaid debit cards of the MasterCard franchise or to Monzo -the second largest Neobank in the United Kingdomwhich operated in its beginnings before having a financial license only with a prepaid debit card.

In the case of those who intend to offer only credit cards, they must face the interest rate limit applicable to consumer loans, which is known as the usury rate. Although it sounds unpopular, this limit, which in recent years has been close to 30% annual effective, is well below the interest rates that are usually charged in the world for financial products offered through digital channels, rates that range between 80% and 110% effective per year in countries where there are no such limits on interest rates. The usual thing is that these very high interest rates end up camouflaged in the collection of items such as the use of the technological platform, the credit study, in management fees, among others, but the truth is that, to grant credits to the population, they do not Banked, the interest rate that the financial institution must charge to make the business profitable -or at least sustainable- must be very high to the extent that the credit risk it assumes is greater. Therefore, it is likely that this rate will be above the applicable legal limit in Colombia, which means that Neobanks focused solely on this type of product must find new sources of income to make the operation viable without violating the applicable regulatory framework.

In the case of those who only intend to offer prepaid debit cards, it will be necessary to study whether this single source of income is sufficient to maintain the high costs of the financial license.

Above, and taking into account the experience of the SEDPES that are operating, reality has shown us that this is difficult. Related to this last point, the Neobanks will have to assume the costs of having a financial license in Colombia while guaranteeing their value promise of zero banking costs. Likewise, as in the rest of the world, they must ensure that clients prefer them and decide to establish long-term relationships with them in such a way that they give the Neobank the necessary confidence to transfer, for example, the payroll account and in general, all their deposits with these institutions and thus avoid that they are used only as entities of rapid and transitory mobilization of resources. All this, to reduce the impact of the high cost of customer acquisition in the long term and thus increase the profitability of the business.

Despite the challenges that entering the Colombian market may represent for the new Neobanks, the main beneficiaries will undoubtedly be consumers with the increase in competition in this industry, which currently has so few players.

Despite the challenges that entering the Colombian market may represent for the new Neobanks, the main beneficiaries will undoubtedly be consumers with the increase in competition in this industry, which currently has so few players. Likewise, for fintech companies, in the same sense as previously mentioned in relation to traditional banks, the entry of these new players is a good opportunity to make strategic alliances. Fintechs that offer remittance services, payment gateways, technology companies dedicated to digital customer linkage procedures, among others, can be big winners with the entry of new players to the market.

Only time will tell us if the Neobanks, and in particular those from abroad, arrived - or will arrive - in Colombia to stay. Let's hope so!

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FINTECH AT A NATION IN TRANSITION

KENNETH MENDIWELSON FOUNDER OF REFINANCIA AND REFERENCIA ENDEAVOR COLOMBIA AND COLOMBIA FINTECH BOARD MEMBER

What would happen if more of us pursued great accomplishments that inspire others to conquer far and unknown horizons?

As little kids, we were told stories about travelers who, against all odds, reached new exciting destinations full of opportunities. This is how we remember Marco Polo, when he went along the Silk Trail; Christopher Columbus, when he arrived in the Americas; and even Neil Armstrong, when he set foot on the moon. To some, these stories capture our imagination and unconsciously influence how we plan our challenges and projects.

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ENTREPRENEURSHIP AS A SOURCE OF PROGRESS Today, the term “entrepreneurship” is a trend and became part of our common language.

Young college students increasingly see entrepreneurship as a way of life and are attracted to engaging in and looking for the adventure and thrill of creating a business venture. However, we lack enough of “our own” role models that potential entrepreneurs can use to follow as examples during the different entrepreneurial stages and help them meet their challenges on their journey. In our country, many business stories have not been told, and there are some stories that are widely known, but did not have a happy ending.

The stories we are exposed to support our inspiration to pursue our own adventures and our own dreams. Thus, we as entrepreneurs, are

not only responsible to our companies, teams and investors, but also to our community as we need to become models that support that which is possible in this country. If the appropriate icons and role models are identified and documented, a unique opportunity will be created to influence this generation’s collective psychology, aiming at a larger number of us doing great deeds that will contribute to our Nation’s progress.

FINTECH: FERTILE GROUND FOR ENTREPRENEURSHIP Loans have come in useful for mankind for centuries. The first Genoese merchants understood that allowing a buyer to pay for goods in future installments was a good deal, as long as the customer could prove they had good payment capacity and good credit behavior. Banks consolidated to support these transactions, and technological advances continuously allowed for modifications to change how loans can be accessed and used. It became clear that the good use of loans would boost economic growth. Nowadays access to credit is transforming and new opportunities have emerged, not only for banks, but also for Fintechs. A loan is still a loan, but the way loans are provided – and how clients expect to get loans – is making a transition. This condition is creating open space for new players.

Just like in the rest of the world, in our country Fintechs became real as the adoption of new mobile technologies and data intelligence allowed for the provision of more current and convenient financial services to consumers.

Alternative loan making channels were created, which are being currently adopted. Fintechs with the highest adoption potential are those that capture the details of our idiosincracy and adjust their value proposition to the cultural habits and patterns that define our behavior, i.e. they do not only import new technologies and operating models into our country, but also adjust them to our local reality, and to our environment.

capture detailed knowledge of the niches they serve. They use innovative channels, leveraging tools enabled by technology, and also design convenient tailored experiences for Colombian financial consumers. Given the limited access to financial services in our country and our level of informal employment, there is a lot of room for new innovative solutions to be executed together with local players. This is how alliances with businesses, associations, governments and the banking institutions may be forged to ensure a service according to our own reality.

HAND IN HAND WITH BANKING INSTITUTIONS For the Fintech movement to be actually big and influential, it is important to work together with banking institutions. My experience with Referencia and Refinancia has led me to believe that banks are allies in this process. Banks have earned a level of trust from savers, which allows them to be natural destination for deposits. . Thus, banks can manage lower funding costs than Fintechs.

However, Fintechs may be more versatile in managing transactions and loan needs for certain niches with a special behaviors, different from those shown by traditional clients. Fintechs’ curiosity, along with their agility in creating alternative services designed for convenience expected in such niches, allows for new scalable business opportunities. When these two forces – banks and Fintechs – are combined, consumers benefit with convenient services and better prices.

Since the beginning of the Fintech revolution around the world, banks’ have shown interest in forming alliances to leapfrog in their digital transformation. In many cases, banks bought novel proposals, while in other cases, banks decided to launch their own efforts. As solid value propositions are consolidated, banks started to understand how to work with Fintechs to support their adoption and scale-up.

We can now see in our country how many

Fintechs are able to become “specialists” and

KENNETH MENDIWELSON |

31

new offerings are being developed , and are being adopted by banks. Regulation agencies and financial supervisorsare acknowledging Fintechs’ value. For instance, the Financial Superintendence of Colombia has enabled SandBox for new alternative pilots, and Asobancaria is working with Colombia Fintech to have proper regulation adjusted.

FINTECHS AND CORONAVIRUS Just like in any other industry, Fintechs were deeply affected by the coronavirus crisis. Initially, a larger number of people were unable to repay their loans because their income structure had changed. There were fewer disbursements because people were only consuming the strictly necessary products during lockdown. In addition, many Fintechs that give loans were using shortterm funding sources and such funding started to disappear very quickly.

But all crises provide opportunities. Fintechs became a useful alternative in the country, as they could be an emergency financing mechanism for consumers, SMEs, and freelancers. Fintech capillarity and ability to quickly assist clients with special needs through digital platforms and alternative channels offered opportunities to those who were willing to have their operations adjusted to serve these niches. Not everyone made adjustments, and not everyone was ready to, but those who did make adjustments were exposed to an adoption speed faster than was originally budgeted. In 2020, financial consumers overcame a lot of barriers to using digital financial services; this launched certain companies to relevance.

Banks were particularly affected by the coronavirus, mostly due to higher delinquency rates. They did not only have to provide their clients with financial relief, but they also had to have their operations adjusted to act in the “new normal”.. In the recovery and collection processes, banks had to deploy flexible and innovative mechanisms that will consider the debtors’ new reality. The use of data on this front became critical to producing the best solutions in each case and, once again, experts’

32 | EMPRESAS FINTECH EN COLOMBIA

specialization in refinancing defaulted cases became fundamental for the economic crisis not to turn into a financial crisis. This also offered an opportunity to sophisticated and novel portfolio managers, who were ready and able to provide support through their overdue loan management processes.

The government’s reactions to the crisis also led to opportunities for certain Fintechs. For instance, guarantees enabled by the government for SME loans and for self-employed individuals credit, allowing for a unique option to explore payment behaviors in niches which credit experience was uncertain. As the government understood that Fintechs were a source of credit, some players across the sector got to use these options to serve new clients. In turn, some players in the payment dispersion field also properly took advantage of this option created by the government to partially ease their requirements.

In short, it was clear that the country was in need of loans for reactivation, as well as alternative resource dispersion mechanisms, and some Fintechs got how to produce solutions working with the government, the banking institutions and merchants to support the economic recovery.

They were able to leverage their capabilities to offer a useful service to the financial ecosystem.

PROTECTING OUR REPUTATION Fintechs are part of a system that relies on trust, as they manage their clients’ money and consumers’ behavior data. To Fintechs, it is critical to establish an institutional reputation that earns the banks’, funders’ and clients’ trust. We must be systematic in the way that we present our sector and our companies to society, as well as in the initiatives that help build the general perception of the business we carry out. In particular, innovative business models that are not completely tested, will certainly require flexibility from all of the company’s stakeholders. Without this trust resulting from a good reputation, this will be harder to meet.

Every crisis brings with it opportunities, Fintech companies began to become a useful alternative for the country, since they could be a mechanism for distributing emergency financing for consumers, SMEs and independent workers

KENNETH MENDIWELSON |

33

A good reputation will help us open doors, explore ideas together with allies, promote innovative projects, and attract talent. But also during crises – which are continuously present –, reputation is an asset that will help protect ourselves, if taken good care of. We expect that Fintechs in our country are able to earn trust to continue on the path to growth and market adoption.

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CASE STUDIES INSPIRING OTHERS A few years – or maybe decades – from now, we will look back and assess our participation in this opportunity we were offered when Fintechs were something innovative and curious. We will see whether we were able to transcend to support the needs in our country, and also to

ensure access to financial services tailored to our consumers. We will see all of the mistakes made on the journey as well as all of the wise moves that helped our positioning. We will recognize who designed highly accepted products, and who could grow their endeavors to turn them into important recognized names in our community. We will understand the banks’ role on this journey and which alliances were the most important ones.

In the meantime, it is our responsibility to commit to doing things right, in depth, in order and ethically. Also, we must tell our stories as we

go on this journey so that, following our example, more Colombians feel inspired to start their own “world-class� business in this or other sectors.

Not for vanity, but to document our own case studies to become models that can influence our business environment. Thus, we will write together a story that will define the values associated with this generation of Colombian entrepreneurs. If we can capture positive, big and inspiring cases, we will end up contributing beyond the obvious to the so much needed progress of our Nation in transition.

Instagram: @kennethmendiwelson

KENNETH MENDIWELSON |

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“We dream, surprise and innovate to be number 1” Grupo empresarial

36 | EMPRESAS FINTECH EN COLOMBIA

FINSOCIAL, FOUR FORCES COME TOGETHER WITH A FINTECH VISION

In June 2012, a dream was born, which became a reality not just as a productive business model, but also as a contribution to society, seeking to improve the quality of life of public teachers and pensioners in Colombia.

At that time, 15 professionals decided to make a difference and started the FINSOCIAL operating engine to offer technology-backed low-risk financial solutions under the modality of payroll deduction loans and consumer loans, seeking to protect the integrity of our customers, help them achieve their goals, support them in their and their family’s difficulties.

The first task was to tear down the informal credit practices that bring unease and reduce the quality of life of those who often resort to microcredits for not having access to traditional banking.

True to our values, our cornerstone is the social purpose of including financially and positively impacting the life of our customers by providing fast, agile loans without codebtor.

To build the brand, the four founding partners spent days structuring the business model and it was just at that moment that they realized that our target audience was being neglected by traditional banks. The reason? Many were reported in credit bureaus, others due to their repayment capacity, level of indebtedness or simply for being unbanked, and 50% of our customers are in that range.

At FINSOCIAL, we guarantee their security and give them a second chance to improve their credit score. Public teachers and pensioners: two low-risk niches in a huge market; their source of

FINSOCIAL |

37

FINSOCIAL’S achievements in digital transformation: Projects, FPDA (Finsocial Personal Digital Assistant): Tool that allows advisors and customers to manage loans by obtaining data directly from their ID. A scanner retrieves the information and requests the necessary authorizations, and from there the customer is profiled through a Web Service connection with Credit Bureaus and other sources of information. payment is the nation and income stability is virtually lifelong, which is very important for the margins in our portfolio, standing below 1%.

Back in 2015 we took the first steps towards the FinTech sector with the use dematerialized promissory notes through Deceval, always ready to continue supporting our initial market, giving access loans with greater coverage and speed.

In 2018 we decided to develop the Finsonet software inhouse, a platform that would give us the final pass to be part of the fourth industrial revolution in Colombia.

Thanks to the important strategic partnership with RED 5G, and given our position in the financial sector, the Inter-American Development Bank (IDB) recognized us as FinTech of Latin America and the Caribbean in 2018, after the investment of the important international fund KANDEO. This is the result of the work and knowledge of a team that made a common dream possible: to help and generate positive impact in the communities through financial and social inclusion.

In addition to our high standards, certifications, dedication, passion, technological effort and social inclusion, we began to be part of the Colombia Fintech Association and main members of the board of directors.

After a year of preparation in 2019 and participating in the local and international selection panel, FINSOCIAL became the first company in the Caribbean Region to be part of the Endeavor high-impact entrepreneurship network, which promotes economic development, mentoring and enterprise transformation.

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Complaints & Grievances PQR PQR or customer service module: Development of innovation, technology and human resources, enabling streamlined and timely customer traceability, in addition to allowing us to establish rapport and efficient information management.

Omnichannel Strategy - Finsobot Inbound marketing strategy “the flywheel” - Loyalty

Exponential Growth Our positioning in Barranquilla opened the doors for us to reach more teachers and pensioners now throughout the country, and a year after starting our operation (in 2013) we began our growth plan. We currently have offices in the main and intermediate cities and some municipalities where we identify the need for access to credit.

So far, we have improved the quality of life of more than 30,000 customers nationwide.

For 2020, we intend to increase credit placement by 60% and reach every corner of the country, with the premise of not expecting customers to come to us, but to reach out to them through technology, understanding each and every one of their needs.

The company’s CEO, Santiago Botero, assures that FINSOCIAL’S business path is based on conscious capitalism driven by the determination of entrepreneurs and dreamers, who identified the journey and built deep roots of hard work, management, imagination and innovation.

Juntos, hoy esisposible Together, today possible

FINSOCIAL, ready for the new decade

YAnd Finsocial firmaron la operación más operation grande Finsocial signed the largest registrada para unan originador de of registeredeninColombia Colombia for originator crédito no regulado, con una transacción de unregulated credit, with a transaction of USD125 millones.

The KANDEO international investment El fondo de inversión internacional KANDEO hacehas parte de Finsocial desde 2017. fund been part of Finsocial since 2017.

La contheelentry ingreso de Thedécada decade empieza begins with of Finsocial Finsocial a la red de emprendedores to the network of entrepreneurs Endeavor Endeavor y el registro parahistory la historia ser the and the record for the of de being la primera empresa de la Región Caribe en first company in the Caribbean Region in pertenecer a esta comunidad.

Since 2018, the IDB has highlighted como empresa fintech de América Latina y el Finsocial as a fintech company in Latin Caribe.

America and the Caribbean.

USD125 million.

belong to this community.

25

Estamos entre las

mejores empresas para trabajar en Colombia.

Desde 2018 el BID destaca a Finsocial

FundaciónFinsocial

GreatPlace Placeto to Work certifies Finsocial Great Work certifica a Finsocial como unaofde lasbest mejores compañías as one the companies for para work in trabajar en Colombia Colombia in 2019. en el 2019.

A través de Fundación Foundation Finsocial la firma Through thela Finsocial the estimula el acceso a la educación y firm stimulates access to sportsdeportiva education financiera para hogares de bajos ingresos y and financial support for low-income comunidades vulnerables, impactando a households and vulnerable communities, más de 26.000 personas. impacting more than 26,000 people.

Great en inFinsocial Great Culture Culture reconoce recognizes Finsocialel the desarrollo de una cultura organizacional development of an organizational culture amable sostenible, la cualwhich aspiraaspires a contar friendlyy and sustainable, to tell con 1.200 colaboradores para 2022. with 1,200 employees by 2022.

In 2018 Finsocial received the B Corp Best for the World por sus prácticas de distinction Best for the World for its responsabilidad social y medio ambiental. social and environmental responsibility.

En 2018 Finsocial recibió la distinción B Corp

Mercado FinsocialFinsocial Market

55,3% Docentes Teachers

44,7% Pensionados Retired

63%

37% Hombres Men

Mujeres

Women

FINSOCIAL |

39

December 2019 Data

US $132.750

Anual origination ⁽¹⁾

Equity ⁽¹⁾

Data in US $ millones

Data in US $ millones

x US $ 40 mill

Millions

389

Current portfolio balance 234

2017

2018

2019F 20 2OE 20 21E 202 2E 202 3E

Net profit ⁽¹⁾

Millions 2019

US $4.890 Millions

Profit before taxes

22

2017

2018

24

2019F 20 2OE 2021E 202 2E 202 3E

Data in US $ millones

676

New injection x US$ 40 mill

0.36%

US $5.448

10

Current portfolio balance ⁽¹⁾⁽²⁾

Data in US $ millones

513

40

past due payroll deduction loan portfolio index

EBITDA

82 63

86

58

27

Millions

future income pending of current portfolio

111

150

Millions

US $58.045

151

313

US $72.856 Loan origination

New injection

354

29 19 0

2

2017

2018

4

10

2019F 20 2OE 20 21E 202 2E 202 3E

218 45

2017

91

2018

139

2019F 20 2OE 20 21E 202 2E 202 3E

⁽¹⁾ Assumes FX COP / USD of 3,200 for all years ⁽²⁾ LManaged portfolio levels in 2023 equate to a target market penetration of 5%

investor@finsocial.co www.finsocial.co

INVESTING IN FINSOCIAL IS BETTING ON A SOCIAL PURPOSE IN THE COUNTRY We are a company with heart, backed by a team of more than 550 collaborators and a robust technological base, which makes us the #1 option for our customers.

Teachers in administrative careers and pensioners are our target market, these groups are one of the least risky in the consumer loan market due to the low volatility of their income and because they are paid directly by the National Government.

We currently have more than 2 million potential customers across the country and we always strive to improve the quality of life of each one of them.

We became the first in our segment to be endorsed and certified by the international rating agency Fitch Ratings, with ‘ABPS/S2(col)’ with a stable perspective outlook. According to the agency, we have shown “high performance in general functions as administrator.”

We also earned the trust of large international and national investors, such as Kandeo Fund,

40 | EMPRESAS FINTECH EN COLOMBIA

finsocial

finsocial

finsocial_ sas

and institutional funding, such as Bancolombia, Banco de Bogotá, Banco de Occidente, Coltefinanciera and Bancoomeva. We have great allies that support and protect our loans: Grupo Sura and Seguros Mundial.

We continue working to consolidate our position in the national and international market and to earn our customers’ trust. This year we hope to become a regulated entity, this will double our worth and quadruple any new investor’s value.

What sets us apart from the competition is our own technological platform (Finsonet) developed inhouse, with a scoring system that safely expands the potential customer base. We go where others cannot, we have strong brand identity and target niche development, since we have institutional funding by entities regulated by the Financial Superintendence.

We are permanently strengthening our base of funders and allied financial entities, among which we highlight the largest investment in Colombia by one of the most credible international banks: Morgan Stanley, who, trusting our country and the entrepreneurial ecosystem, has invested $125 million to boost the origination of new consumer loans. A privileged position that allows us to “swim with the big fish” and validate our operation. nuestra operación.

RED 5G, FINSOCIAL’S KEY STRATEGIC TECHNOLOGICAL PARTNER RED 5G is without a doubt FINSOCIAL business group’s top partner. The company, which started as our systems engineering department, had an exponential and accelerated growth, to such an extent that it achieved business independence and is today the quintessential technological supplier of every company that makes up the group and others.

The first technological creation of the company RED 5G was the Finsonet software for FINSOCIAL, which manages the loan procedure from the sales advisor to the disbursement. The platform has evolved and has gained experience in simplifying the customer, the advisor and the company’s efforts. All for our users to have a better experience.

customer under this modality was Bancoomeva, a company that, in addition to purchasing the FINSOCIAL portfolio, decided to acquire the platform.

Currently, the tech company is developing machine learning, the computer science of autonomously learning based on behavior, which will be applied to the decision engine to tell whether or not a customer can access a loan. .

HEALTH AND TECHNOLOGY, THE REASONING BEHIND MEDILÍNEA Between 90 and 180 days is the time that Colombians must wait, on average, to receive specialized medical attention. This is one of the greatest barriers faced by socioeconomic strata 1, 2 and 3, which prevents them from accessing and enjoying optimal health services.

Our platform developed inhouse by RED 5G began to grow and Finsonet started awakening the interest of different companies outside the group, bringing it to a higher level, no longer exclusive to FINSOCIAL but also made available to Bancoomeva, Allianz and Seguros Mundial.

We entered the market in 2016 and we are the link between users and health, which is why we developed a technological platform that allows Colombians to access specialized doctors and services within 3 days at a lower price than a private appointment.

RED 5G continued innovating and decided to launch online loans for third-party sales, its first

Our customers need no affiliation or membership, no monthly fees and no age limit are required.

FINSOCIAL |

41

They just have to sign up for free through our service channels (telephone, chat, app and web), schedule an appointment, generate the payment PIN and then go directly to the medical specialist or to the selected medical institution.

More than 13,000 people from the Colombian Caribbean have trusted our operation, we have a portfolio of more than 1,600 medical services in more than 71 specialties, with 103 service providers, in Atlántico, Cartagena, Santa Marta, Magangué and Valledupar.

We are focused on selling all types of insurance products, both to individuals and legal entities.

And we ventured into the sale of microinsurance: insurance adapted to the needs of each customer at a low cost, to reach populations that our insurance providers usually do not reach, promoting social inclusion and working hard to become a large Insurtech company.

BEING AMONG THE BIG INSURETECH, WIIPO’S GOAL – FINANCE FOR EVERYONE We believe in inclusion and that everyone deserves to be insured, at Finance for Everyone we created Wiipo, a technological financing platform for insurance policies that allows customers to access and pay for these services within a maximum term of 10 months.

Wiipo has a policy simulator, where the agency can project the value of their insurance and the respective fees to the customer. Once the conditions are accepted, the customer receives an OTP code that confirms the link between the service and the payment.

PARA TODOS, PROTECTION AND INNOVATION We are an insurance agency engaged in protecting Colombians with our collective plans and through tech support tools.

Our digital development allows users to know the insurance policies they have, the current status of their claims, receive online service and their payment status.

The platform has been our greatest support in the development of “Para Todos” (For Everyone), which began operations in June 2018. Last year we became the first certified B corporation insurance agency in Colombia.

42 | EMPRESAS FINTECH EN COLOMBIA

Our projection is to be among the big InsurTech companies in Colombia, we provide streamlined processes, without formalities, that do not require documentation and our customers can apply from anywhere.

We favor our customers with a lower financing interest rate than credit cards and we currently work with Allianz.

FINSOCIAL FOUNDATION, GIVING AWAY SMILES The Finsocial Foundation was born in 2018, supporting the generous nature, philanthropic spirit and corporate social responsibility of FINSOCIAL. The objective of the foundation and of our Corporate Social Responsibility is to look after the interests of children, youth, women teachers head of household and older adults in the country, through different programs that promote education and seek comprehensive development in the most vulnerable areas, reducing poverty rates and transforming their mentality to project a better future.

We firmly believe that financial education is the secret to reduce poverty rates, social and gender inequality in the country, we work hard for financial inclusion in each of the links of the social chain to reduce economic indicators that put our society at a disadvantage.

Through our different campaigns, we have been able to reach even the most remote regions in

the country. Our vision is to execute projects that promote education and improve the sociocultural environment of people with limited resources, such as: schools, educational centers and nursing homes for the elderly.

At the end of 2019, we socially impacted more than 25,000 families in Colombia through the following programs: Joy Brigades, supporting educational institutions, Goal Finsocial, promoting the development of sports activities, Financial Education, Finsocial Christmas, and volunteer programs in all the country.

Currently, we work with and support four world-renowned NGOs: Scholas, Global Money Week, UN Global Compact and UNICEF. We have partnered with UNICEF under the Schools of Peace cooperation program, which seeks to increase opportunities for children and adolescents in areas affected by the armed conflict in the department of Cordoba.

For 2022 we expect to be the country’s first nonprofit organization with high impact strategies in financial training, always hand in hand with national and international strategic partners and allies.

OCTUBRE 2019 +25,000 families reached +15,400 school kits delivered to children from the schools with most needs in Colombia +1,000 pairs of shoes delivered to different foundations, 5 soccer schools and a total of 463 child athletes have received uniforms, cleats, balls and gear. +1,000 children and 100 teachers in more than 8 schools in the Department of Atlántico have been reached by our financial education training program.

28 schools supported with infrastructure to improve the educational environment of children and teachers; 36 volunteer events with FINSOCIAL employees. + 50.000 benefited families during Covid-19 through the delivery of foods.

Implementation of a financial education program in all of Finsocial´s credit lines with our international allied Aflatoun.

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We are more than happy to form part of the community Fintech in Colombia

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RESUELVE TU DEUDA, THE CREDIT REPAIR THAT CHANGES LIVES

Resuelve tu Deuda, led by Rodrigo Nadal and Cristina Cervantes continues with its expansion plans in 2020 expecting to have more than 300 collaborators in Bogotá and Medellín.

In Mexico back in September 2009 when this story began, two Mexicans, Juan Pablo Zorrilla and Javier Velásquez, were pursuing their Master of Business Administration (MBA) degree at Stanford University. During that year Mexico was going through an economic crisis, this motivated them to be creative, and innovative in the financial sector, a dream that has now become a reality, and with which has changed more than 200,000 lives, not only in their country, but also in Colombia, Argentina, and Spain.

COLOMBIA, THEIR SECOND HOME With their restlessness concern to explore new markets, and take the project: “Resuelve tu Deuda” to other countries, they landed in Colombia offering an alternative to the “over-debt” problems faced by thousands of Colombians; Since 2014 Colombia has become the second home of “Resuelve tu Deuda”. In the

last 10 years, it has grown exponentially, as it has become the largest credit repair company in Latin America, leading to land in Spain as the fourth expansion country. They currently have more than 20 branches around the world, and more than 1,000 collaborators, which has made it possible for them to have settled over 175 thousand debts.

Debts paid

Years

on market

Branches

(17 in Mexico, 2 in Colombia and 1 in Spain)

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PROVIDE SECOND CHANCES The mission of “Resuelve tu Deuda” is clear: to help people who want to, but can no longer pay their debts. They achieve this through a personalized plan that adapts to the opportunities, and needs of each client so that at the end of the program they pay their debts with their own money, and most importantly, understanding their current financial situation.

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All of this is achieved through monthly savings.

“Resuelve tu Deuda” has managed to transform a small segment into traditional collection where people learn to save to pay their debts. When the client has enough money saved, Resuelve tu Deuda Negotiation Department goes into action, achieving debt settlement, with discounts that can reach up to 50%. Thus, the premise of this credit repair company is to help the financial system by generating a win-win: to begin with clients pay their debts, and start their credit

life again; at the same time, the institutions recover part of a portfolio that they already considered past due. During its 10 years of operations, Resuelve tu Deuda has managed to understand the debtor, and guide them to learn how to manage their over-debts, which on average is 10 times their salary, a worrisome figure since a debt of 18’000,000 is supported by a salary of 1,500,000. So stopping paying for services, or housing for 10 months to pay off a debt is impossible. This is the financial issue that Resuelve tu Deuda addresses, in an innovative, and inclusive way.

WHY RESUELVE TU DEUDA? Throughout the process Resuelve tu Deuda becomes a coach for its clients, in addition to supporting them in the settlement of their debts, they initiate them in the world of savings, providing tools and tips to improve their personal finances, and their credit-reporting to the Central risk. It should be noted that the entire program is accompanied by technology developed in-house, which allows them to efficiently serve between

100 to 100 thousand clients. The advice includes an analysis of the credit bureaus, a tailored debt settlement plan, estimates of historical discounts, and subsequently the contracting of services, all through a digitally signed contract, which provides the client with guarantees on the correct compliance with the program. The tranquility of the clients is the most important thing, since the situation they are going through in most cases they face them completely alone, that is, there is not always support from the family, nor financial dependents, which causes clients to go through moments of high stress, finding in Resuelve tu Deuda an ally while improving their situation.

Its Customer Service team, made up of collaborators who specialize in maintaining motivation and discipline in each of its clients.

Consistency in saving is the key, and Resuelve tu Deuda acknowledges, and guarantees all those who are paying on time, and continue with their savings plan during 12 months, and if none of its obligations have been settled, the credit repairer returns the 100% of the money, and an additional compensation.

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Case of success Under the title: “Fintech in emerging markets”, Stanford University conducted a study on the success story of Resuelve tu Deuda. This is an investigation where explains how the founders of Resuelve tu Deuda, Juan Pablo Zorrilla and Javier Velásquez, built and consolidated this company, and after 10 years of operations has a presence in 4 countries. In the document, the University points out that the 2008 financial crisis strongly affected the Mexican economy, so much so that the overdue credit card portfolio rose 83% compared to the previous year, according to the Bank of Mexico. “People were struggling, they were losing their jobs and they did not have enough money to pay their debts, the NPL ratio at that time was 9.4 percent, while it is currently around 5.3. We knew there was a need and, the following year, we began operations in Mexico, ”said Zorrilla, who at 28 was one of the pioneers in the credit repair market in Mexico. “The use of other resources such as Big Data in different phases of the process has allowed our operation to be more efficient. From the planning for the rehabilitation of the user to the negotiation with the banks, all the stages are monitored and patterns are extracted with which we can better measure the needs of our clients and their real payment capacities ”, mentioned Javier Velásquez, Co-founder and CEO of Resuelve tu Deuda. In addition to being a pioneer company in the

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The Fintech market was also in the field of Digital Marketing, as Facebook selected her to test the WhatsApp Business pilot and she has been invited to participate in DreamForce and Google conferences in Silicon Valley.

Figures During these 10 years of operations Resuelve tu Deuda has managed to settle more than 175 thousand debts and will seek to continue expanding to more countries such as Brazil, Italy, Portugal, Peru and Chile within the next 5 years.

In its 5 years of operation in Colombia Recovered more than

More than

75.000

22.000

million pesos in portfolio

paid debts

Since 2018 that Spain is open

More than

900

paid debts

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A LOOK FROM THE PERSPECTIVE OF CRISTINA CERVANTES, Co-General Manager Resuelve tu Deuda For Cristina Cervantes the company has a very clear objective: to provide Seconds Opportunities to all those people they want, but can no longer afford debts.

“In 2014 we arrived in Colombia with the firm conviction to serve this market; 4.3% of the loan portfolio consumption was expired and we needed help all those people to face the problem and solve it.”, says Cervantes.

Although in Mexico the model had already been tested successfully during the previous 5 years helping more than 15,000 clients per year, they insisted on verifying that the Colombians they were also willing to save to pay their debts, and so it was: by 2015 they achieved that more than 4,500 Colombians started their credit repair process through Resuelve tu Deuda.

In 2016 the consumer loan portfolio suffered a decrease and overdue portfolio growth above 10%. More and more people are they were unable to continue paying your creditors the obligations acquired.

In that year with a growth of 100% against the previous year, the credit repairer was helping almost 10,000 people and the main factor for which they came seeking advice, it was an over-indebtedness of ten times its monthly salary, the same behavior that you had in Mexico.

“In 2017, in addition to having had a 50% growth, we started to have our first graduated clients, those clients that, after 24 months and after having settled all their obligations, they were ready to continue.

These 35-45-year-old clients barely they were beginning to build a heritage; they had not acquired their first auto loan or they had bought a house.

From this one year we started reporting at the central risk positively to our clients that will present an accomplished behavior of the

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payment of our services, with the intention of help them improve their credit score to when they graduate from the program.”

Co-General Manager of the credit repair company.

“Out of every 5 people I’ve done the following question: If I borrowed money from you person who has already stopped paying, to pay debts above, would you? all have responded to me - “From no way”. Well, between 2011 and 2012 in Mexico we decided to change that perspective and we started lending money to our clients more punctual, and the pleasant surprise has been that, If you are within your ability to pay, they are very good payers”, added the executive.

In 2018 they decided to trust their Colombian clients and began to grant credits to all those who perform specifically your savings within the program and the results have been very positive.

“We are backed by more than 5 years working in Colombian territory, where we have helped more than 50 thousand clients and recovered 75 billion pesos in debt to creditors. This would not be possible without the more than 200 collaborators day by day they show that we are the best option for all those who are looking for a second chance and for all creditors an additional alternative for the recovery of wallet without having to keep wearing your interaction with the debtor. “For the next 5 years we seek to continue growing serving more of 15,000 clients per year and close 2020 with more than 300 collaborators in our offices in Bogotá and Medellín. While technology allows us grow quickly the team remains our main investment. In order to achieve extraordinary results we need a team of the first level, that shares the Resolve culture, that you like to help and above all that you have all the desire to build a successful professional career, This is how we will get to transform in a way positive the life of all those who want but they can no longer pay.

Cristina Cervantes concluded.

They support us for more than 5 years working in Colombian territory, where we have helped to more than 50 thousand clients and recovered 75 billion pesos in debt to creditors.

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DaviPlata has a world of possibilities for you to manage the money from your cell phone, fast and easy.

52 | EMPRESAS FINTECH EN COLOMBIA

DAVIPLATA, A FINANCIAL SOLUTION IN THE HANDS OF EVERY COLOMBIAN

Allowing all people to access the benefits of the products and services of the financial system is one of the great challenges that modern societies face. Recently, technological development and new ways of relationship between people and banking have put on the table the need to generate innovation processes and a deep understanding of the client to allow financial institutions to offer products that fit the customer needs and easen their daily life to improve their well being and quality of life.

2011: THE BEGINNING OF A NEW ERA IN DIGITAL BANKING In 2011, only 40% of the Colombian population had access to a financial product according to the Global Findex of the World Bank. This low penetration of financial products in the country showed the importance of generating financial and social inclusion processes to Colombians in order to boost the acquisition and usage of financial services.

Adjustments were made to financial regulation in 2011 to allow financial institutions to offer a new type of products with no paperwork and remotely to open it, and without leaving out the stability and security of the financial system as a whole. Before these changes were made, customers needed to go to a bank branch to fill out documents in order to get a savings account, making the process complex and expensive.

Thanks to these changes, several banks began to offer savings accounts with a simplified process through cell phones; In this path DaviPlata became the leader and pioneer in the implementation of this type of financial products with a simple and easy process of acquisition.

These regulatory modifications boost financial inclusion in Colombia as more banks started to offer these products.

DAVIPLATA: A PRODUCT IN CONSTANT DEVELOPMENT

Also, access to financial products of rural and low income population was limited and it presented a significant gap compared to the urban population.

This lack of access responded to different types of barriers, some related to the supply, like physical presence of bank branches or the costs associated with the products, but some other limitations were related to customers itself like the lack of knowledge of the products available or even the perception of no need for the products.

In 2012, Banco Davivienda launched DaviPlata, a financial product that seeks a closer relationship of clients with the bank of those who were unbanked. The development of DaviPlata was possible thanks to the multiple efforts of different areas of Banco Davivienda to design and implement a 100% digital product that is handled directly from a cell phone, with a simplified, practical, easy to use opening process, and without costs or commissions to the client.

Taking into account these problems, the colombian financial industry, along with the regulatory and supervisory entities, undertook the task of promoting financial inclusion in Colombia by allowing the offering of products adapted to the customers’ needs and eliminating the existing barriers when interacting with the bank.

DaviPlata was initially developed on the SIM Tool Kit - STK technology, which allowed any Colombian, with a cell phone and ID number, to have the product. This allowed DaviPlata to reach every colombian with a complete and wide range product indistinct of its location or income. DaviPlata’s adoption and adaptation

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among colombian population was a success after launching to the market, making possible to accelerate financial inclusion in the country.

In 2016, DaviPlata evolved to offer its services through a mobile application, expanding the range of services offered. In this transition from STK technology to the mobile application, services offered were enhanced and personalized, allowing a better experience to the client and an easier way to use it.

DAVIPLATA’S ADD VALUE TO THE COLOMBIAN MARKET DaviPlata is a 100% digital product, free to the client, with a transparent language and with a simplified opening process without the need to go to a bank branch and with no restrictions for its acquisition, democratizing financial products in Colombia. The close relationship with the client and easy understanding of the product is one of the added values of DaviPlata. The financial industry has traditionally been viewed by clients as distant and complex. Taking in consideration this reality, during the development of DaviPlata, it was necessary to create and design a product that was understandable to the client, with a self-explanatory language and terminology to create a friendly relationship with the customer.

54 | EMPRESAS FINTECH EN COLOMBIA

DaviPlata has become an ally for Colombians when it comes to carrying out their daily activities and financial transactions. DaviPlata offers to its clients the possibility of making transfers to any colombian, regardless of the other person’s bank, free and immediately. Also, users can pay their utility bills, buy airtime top up, save with a savings pocket within the product and many more, all of this, in the cell phone.

To withdraw money it is not necessary to have a card. DaviPlata was the first financial product in Colombia that allowed customers to withdraw money at an ATM with a code sent to the client through a text message. This innovation revolutionized the colombian financial market and from that moment several entities have adopted this form of withdrawal of money on their products. Additionally, customers have a savings pocket, which allows them to put part of the balance away from the available balance to foster a culture of savings among customers and making it easy for them to achieve their long term goals.

Nowadays, DaviPlata users have the possibility to make purchases in stores through a QR code, improving security by avoiding them carrying large sums of money to make their purchases, facilitating technology adoption, cash reduction and electronic payments.

FINANCIAL INCLUSION FOR ALL: DAVIPLATA IS SUITABLE FOR PEOPLE WITH VISUAL DISABILITIES In 2016, the DaviPlata team acknowledged that people with visual disabilities encountered great barriers to access financial products. Taking into account DaviPlatas motto, that financial inclusion is for all, it began one of the biggest challenges for the team. Working along with the Colombian National Institute for the Blind - INCI, it began the adaptation of DaviPlata application to allow the visually impaired population to use the product with the use of the Talk back functionality (On Android) and Voice Over (On iOS) thats provides voice guidance to the person in a simple and intuitive way. By doing this, DaviPlata opened the doors of the financial industry to those with visual impairments in Colombia.

“La Tecla de la Casita Roja” a solution for the young population “La Tecla de la Casita Roja” is an innovative and disruptive feature launched by DaviPlata in the colombian market that allows all customers to make their transactions from their cell phone keyboard while using any social network immediately and at no cost.

This feature was possible through an alliance with a startup in Israel called PayKey, which allows each customer to transfer money to another person, buy airtime top up, send a money order to another person or divide a restaurant check without opening the DaviPlata application and without leaving the social network.

Since its launching in 2017, more than 700.000 clients have used this solution to carry out their transactions. “The Tecla de la Casita Roja ” is in constant evolution to the new social and financial realities of our clients, offering a product according to their needs.

Buying microinsurance through a cell phone: a change in the market To enhance the services of DaviPlata, in alliance with Seguros Bolívar, one of the biggest insurance companies in Colombia, a microinsurance product was developed for the customers. This product is

a 100% digital, with no exclusions, easy to acquire and at a low cost. In 2019, pet microinsurance was launched allowing customers to insure their dog or cat for a reasonable price.

Nowadays, alternative means of transportation are gaining popularity, and that’s why DaviPlata is offering a bicycle microinsurance that allows the customer to receive compensation for the theft of the bicycle or in case the person injures someone while driving it.

The world of e-commerce with the Ecard DaviPlata The rapid growth of ecommerce in recent years has encouraged people to migrate to online shopping leaving behind the present purchases.

However, the preferred means of payment to make these purchases in Colombia continues to be cash.

The ecommerce usage is commonly used for new generations as they consider time as a very valuable asset and immediacy as an important attribute and ecommerce offers them a solution to their daily activities. However, this group of people faces a reality that prevents them from being part of the digital world and taking advantage of the benefits of commerce that it is the need of a credit card.

Because of this, DaviPlata started to design and create a solution accessible to their customers that would eliminate barriers, such as the lack of credit experience or stable income that face digital natives to get a credit card.

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DaviPlata Clients

Customers are located along the whole national territory, from La Guajira to the Amazon, down in the south of the country. DaviPlata use has been possible thanks to the wide network of bank correspondents of Banco Davivienda that account for more than 23.000 locations with presence in 979 municipalities.

Since 2011, DaviPlata has been the first financial product for 2.5 million Colombians. At the end of september 2020, nearly 8 million customers made their transactions from the mobile application.

The app can be used without having mobile internet being the first financial application in the colombian market to offer this benefit.

In March 2019, the Ecard DaviPlata was launched to the market. With it, users can make their purchases on digital platforms and ecommerce without interest rates or commissions just by recharging the card with the funds from their DaviPlata balance. In less than a year, the Ecard has opened the doors of ecommerce to 1 million customers in Colombia.

GREAT NUMBERS FOR DAVIPLATA TO DATE As of September of 2020, around 11 million Colombians have DaviPlata in Colombia without distinction of gender or socioeconomic status. Those clients have performed more than 900 million transactions since its launch, consolidating it as a widely used product that has contributed significantly to the promotion of electronic transactions and financial inclusion in the country. Users belong to all age ranges, with a concentration among 22 and 45 years of age.

56 | EMPRESAS FINTECH EN COLOMBIA

During 2020, due to the Covid19 pandemic, the number of customers of DaviPlata as of September, doubled in a 5 month period. This extraordinary growth seen in 2020 was accompanied by a remarkable increase in the usage of the product along old and new customers. The amount of transactions done in DaviPlata during the month’s quarantine grew by 300% and the money traded in a month doubled compared to the amount of the first months of 2020.

DaviPlata APP Clients

DAVIPLATA HAS BEEN AN ALLY TO THE NATION GOVERNMENT TO SUBSIDIES DISBURSEMENT DaviPlata has been one of the allies of the National Government in the disbursement of subsidies from different social programs in the country.

Some of the programs that DaviPlata has helped on are Familias en Acción, Jóvenes en Acción, Ayuda humanitaria a Víctimas, transportation subsidies and Familias en su Tierra, Ingreso Solidario, Devolución del IVA, Bogotá Solidaria throughout the country, in urban and rural areas and even in some indigenous reservoirs in the south of the country.

The subsidies disbursement have benefited more than 2.6 million people that have received their money through DaviPlata and they have distributed a just over 7.2 billion COP in about 36 million transactions and people from more than 900 municipalities have been disbursed During 2020, DaviPlata was an ally of the government to disburse all the humanitarian help to people that suffer the negative consequences of the Covid19 pandemic. In this path, DaviPlata participated in the disbursement of nationwide programs like Ingreso Solidario, Devolución de IVA, Familias en Acción, Jóvenes en Acción and regional or local programs like Bogotá Solidaria, making possible for many people around the country to get the government subsidy directly in their phones.

The disbursements made by DaviPlata not only facilitated the reception of the subsidy from the Government but also contributed to the digital adoption of the beneficiaries and opened the doors to the financial system to these people.

During the process of activation of DaviPlata, encounters with the beneficiaries were held in order to show them how to use the product and all the benefits. Also, some lessons of financial education were made to the customers so they can learn about the benefits of savings and the proper use of money to achieve goals in the long term.

During 2020, DaviPlata was an ally of the government to disburse all the humanitarian help to people that suffer the negative consequences of the Covid19 pandemic.

TRANSFORMING THE LIVES OF WORKERS Another milestone that has been achieved DaviPlata is the financial inclusion of low income workers of multiple economic sectors of the colombian economy and even members of the armed forces. DaviPlata has consolidated as the payroll product for low- and middle-income workers in Colombia, being the product through which employees receive the money derived from their work. Likewise, DaviPlata is an ally of SMEs, given the easy process of opening, the zero costs to the client and the large portfolio of services it offers. As of September 2020, more than 15.000 companies have trusted DaviPlata as the payment channel to its employees.

One of the best examples of how DaviPlata has helped companies are the employees of flower crops in the savannah of Bogotá. Before receiving their salary through DaviPlata, these people were exposed to security problems by having to carry the money that was paid to them in cash.

With DaviPlata this problem is a thing of the past, because now they can go to any Davivienda ATM at any time and withdraw their money for free as many times as necessary.

Another example is related to the wage payment of the members of the military. Many of the country’s soldiers work in remote rural areas and may take months to return home. Because of this, their relatives were affected since the money to pay all the bills was not available due to the absence of the account owner. Now the soldiers who are working in these areas can send money to their relatives from there, through their cell phone, eliminating their worries and improving the quality of life of their families.

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DAVIVIENDA ECOSYSTEMS: AN ALTERNATIVE APPROACH TO COMMUNITIES In recent years, Colombia is working to promote electronic payments, given the enormous advantages that this type of payments offers to the society in terms of security, traceability, formality and reduction of transaction costs.

In 2015, Davivienda and DaviPlata had a dream to make a municipality in Colombia into the “first town” without cash for a day. This ambitious project for Banco Davivienda and the country, was possible through the articulation of different private sector actors, as well as of the public sector, that viewed this initiative as the first step to promote electronic payments in Colombia and the perfect setting to show the world that digitization of the economy is possible.

The chosen town for the project was Concepción, Antioquia, a municipality of 5,000 inhabitants in the eastern mountains of Antioquia. During the design process and implementation, interdisciplinary teams from Banco Davivienda visited Concepción for months, learned about its economic transactions and the needs of its inhabitants. Once the initial phase was executed, the stage of training activation of the habitants and shops took place in order to have everything ready for the big day.

The shops of Concepción were activated and started their path to digitization receiving payments of their sales through DaviPlata.

Shops of groceries, beauty salons, bars,restaurants,nightclubs, public transportation and even the church began to do all the money transactions with cash and only through electronics payments.

The big day took place on July 9 of 2015. During that day the residents of Concepción, tourists, government officials, National, local authorities and all the people, enjoyed the experience of a town being 100% cashless and digital. The transactions were carried out by DaviPlata immediately and without costs to the customer.

With this first exercise, it was proven locally and globally that eliminating paper money is possible.

In 2017, a similar model as the one carried out in Concepción was implemented in 4 coffee corridors in the departments of Antioquia, Caldas and Huila, which cover about 45 municipalities. In this exercise, it was possible to involve the entire supply chain of the production cycle of coffee to eliminate cash between actors, from the collector to the marketer. An ecosystem was created around coffee production, that allowed the promotion of electronics payments and a substantial improvement in operational processes and costs reductions. Likewise, Banco Davivienda managed to modify some products to customize them to the needs of the actors involved in the coffee production cycle, facilitating their interaction with the financial system.

In 2019, another ecosystem to promote electronic payments was launched in Usiacurí, Atlántico, known as the second artisanal municipality of Colombia, with great cultural wealth and one of the bastions of the Caribbean culture in the country.

At Usiacurí, a project to promote electronics payments was implemented to eliminate the use of cash for the purchase of the iraca palm handicrafts made by the municipality’s traditional artisans. Actually, anyone can make the purchase of crafts with DaviPlata through a QR code, without having to have cash, safely, immediately and at no cost. Additionally, Banco

58 | EMPRESAS FINTECH EN COLOMBIA

Davivienda will allow these artisans to sell their creations online through a platform that will make available the opportunity for some to start their way to export their products.

With these projects Banco Davivienda seeks to facilitate the life of the communities that inhabit these municipalities, encourage and promote electronic means of payments, contribute to their formalization and the integral development of sustainable and digital communities. Also, it was demonstrated that the elimination of cash in communities is possible and that the positive effects are greater than the costs resulting from the design, planning and implementation of these types of experiments.

Additionally, the implementation of these ecosystems allowed a process of financial education for the residents of the municipalities.

Training sessions of financial education were given to the residents and through these, the knowledge of the financial system was strengthened and the importance of managing money in a proper way, the role of saving and financial planning, for the day basis.

DAVIPLATAS FUTURE: CONTINUE THE PATH OF INNOVATION AND FINANCIAL INCLUSION TO REACH A DIGITAL SOCIETY The digital transformation of the colombian financial system and the new consumers will remain the focus and objective for the future.

Along these years of work, great steps have been taken to make DaviPlata a leading innovation product in the colombian financial industry and that work should continue to consolidate its leadership and stand out as the main digital financial product in the country.

At DaviPlata we believe that financial inclusion should be to all socioeconomic levels, without distinction of age, gender or location. In the coming years, the empowerment of women will be one of the main goals to close the gender gaps that still exist in the access of financial products.

DaviPlata will continue to innovate and enhance their services by offering credit products adapted to the needs and characteristics of the customers. In the future we will work together with local governments to support the construction of smart cities and the creation of innovative solutions for transport and social services among cities.

In the years to come, work will focus on to keep the product at the forefront of new trends and technologies, the generation of alliances with companies of different sectors, such as the one did with Rappi in 2019, for the launching of RappiPay Davivienda, in order to be a financial product that is useful for our clients, facilitating their daily life and improving their well being.

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An alternative bank focused on designing Grupo empresarial financial solutions simple and flexible tailored to the needs of the fashion sector.

60 | EMPRESAS FINTECH EN COLOMBIA

BANKAMODA A BANK AT THE SERVICE OF THE FASHION SECTOR

With only two years in the Colombian market, BankaModa already enjoys a critical mass of over 654 customers1 strong, an achievement expected from a business that brings a novel and attractive proposal for those who are in the fashion sector.

Until recently, in Colombia there was not any known company within the digital financial services niche, and much less it was thought that this sector would ever be exclusively served financially wise, giving a well-deserved

representation. However, BankaModa with their knowledge of what fashion entails for the Colombian economy, decided to bet on it.

Why? Because this is the first pillar of the country’s manufacturing industry, and represents 26% employment rate within the industry, according to the National Administrative Department of Statistics’ (DANE) data, share that represents close to 142 thousand production units from micro, small and medium-sized enterprises registered in chambers of commerce, enterprises

El sector de la moda en Colombia como nicho natural de Bankamoda Está conformado por las cadenas de producción, distribución y comercialización de todos los productos de vestir y mobiliario, principalmente, con potencial de expansión a todo tipo de productos textiles para uso industrial, de construcción, doméstico y decorativo: textil vestuario, textil mobiliario, calzado, marroquinería y bisutería.

2%

5%

Grandes empresas textiles

Marcas reconocidas confección y calzado

93% Productores de confecciones y calzado, satélites y proveedores, marcas pequeñas

Evolución del mercado de moda - Cifras consolidadas del sector (Según las empresas que efectuaron reporte a la Superintendencia de Sociedades en cada uno de los respectivos años.)

Ventas del total de empresas que reportaron a Supersociedades en cada año Cifras en millones de pesos

BANKAMODA | 37,1

29,4 Empresas

61

y calzado

Evolución del mercado de moda - Cifras consolidadas del sector (Según las empresas que efectuaron reporte a la Superintendencia de Sociedades en cada uno de los respectivos años.)

37,1

Ventas del total de empresas que reportaron a Supersociedades en cada año

29,4

Cifras en millones de pesos

1.127

1.030

1.703 17.740

2011 2014 2012 2015

1.097

1.386

2014 2017

6,9%

17.384

7,0%

592

4,2%

6,7%

2,5% 52%

502

18.616

2014

2013

Margen Ebit

2012

Cifras en millones de pesos

2011

1.463

2017

6,2% 10,3%

2017 7,1%

-7,8%

-18,1%

2010

2009

1.499 2016 Ebit del total de empresas que reportaron a Supersociedades en cada año

7,9%

7,8%

1.624

2015

8,6%

7,5%

812

18.884

1.198

2013 2016

Crecimiento

878

8,6%

2016

913

2017

16.079

2015

844

2016

2010 2013

8,9% 2014

970

2013

15.684

Promedio empresa

2015

837

20,2

11,7 2012

2009 2012

23,2

17,6 16,2

10,7

Margen Ebitda

19.149

2010

Cifras en millones de pesos

2011

18,7

1.073

2011

12.093

Ebitda del total de empresas que 2010 reportaron a Supersociedades 12.599 en cada año

2009

2009

Empresas

7,0%

527

Cifras en millones de pesos

3,3% 2,5%

4,0%

2,0% 2,0% 2,5%

2017 2017

2016 2016

2015

2014 2013

2011

2012

0,8%

2017 2010

2016 2009

2015

2014

2013

2012

2011

2010

1.019

2,3%

4,8%

4,5%

1.152

2016

5,5% 5,3%2,7%

285

4,4%

1.231

2015

2009

405

1,8%

945

2014

2017

386

348

2011 2013

429 390 708 777

2012 2010

638

2009

2012 232 92 2013

Margen Neto

1.346

2011

6,6%

6,5%

Utilidades netas del total de empresas que

reportaron a Supersociedades en cada año 505 2010

2014 2015

2009

Así lo hace Bankamoda

Ebitda del total de empresas que reportaron a Supersociedades en cada año Cifras en millones de pesos

2009

837

2010

844

Cliente accede al sitio web:

8,9% 8,6% Diligencia solicitud en línea y la sube al sistema

1.097

7,0%

6,9%

1.198

2013

8,6%

Comité de crédito: 7,9% firmas de autorización complementarias

Procesos complementarios:7,8% llamadas y 7,5% visitas

BankaModa hace recepción y estudio del crédito

1.703

2011 www.bankamoda.com 2012

Margen Ebitda

6,7%

1.386

2014

2017

2016

Gestión de cartera 2015

2014

2013

Desembolso

Envío de pagaré PDF

2012

1.463

2017

Formalización de la operación virtual

2011

1.499

2016

2010

Aprobación

2009

1.624

2015

Documentos para tener en cuenta al momento de realizar la solicitud Utilidades netas del total deDeclaración empresasdeque renta Adjunta información del reportaron a Supersociedades en cada año negocio y proyecciones Cifras RUT en millones de pesos

92

232

Margen Neto Estractos 3,3% en línea

Extractos bancarios

Cámara de Comercio

638

Documentos especializados del sector

C.C. Representante legal

390

429

348

386

405

285

2,5%

Pagos electrónicos

Pagos B.I de la operación

2,7% 2,3% 2,0% 2,0%

1,8%

2,5%

Así lo 62 | EMPRESAS FINTECH EN COLOMBIA

hace Bankamoda

2017

2016

2015

2014

2013

2012

2011

2010

2009

2017

2016

2015

2014

2013

2012

2011

2010

2009

0,8%

that may vary from “natural people” of the simplified regime, to SAS companies.

Becoming a sponsor, or ally of such a prosperous sector, it also means to invest consciously in the immense social matrix that compounds it. An industry that, contrary to the image perceived by the” collective imagination”, covers beyond the fields of textiles and confection, but as well textile-clothing, textile-furniture, footwear, leather goods and fantasy-jewelry. Thus, it has been the proposal from three entrepreneurs and founding partners who, supported by six other investors, decided to sow the ground in 2017 with a strong commitment to generate progress through social transformation, and access to opportunities. What was then a dream, in this 2020 has been taking strength, and its own-voice to a greater extent.

INNOVATION FOR SOCIAL MOBILITY María del Mar Palau, BankaModa’s founder and head manager, knows the sector extensively due to her experience as Deputy Minister of Business Development (2013-2015), and her successful performance at the National Association of Entrepreneurs of Colombia (Andi), as well as at Bancoldex among others, she is certain that the more this project is focused at helping families living off the fashion business, the better the

return it will have: “One would like to imagine that this is a seeder of potential transformation of social mobility”, she says, with the full confidence that this is already happening. BankaModa’s main approach has been based on positively change people’s reality in this sector, who are full of ideas, creativity, illusions but do not have access opportunities to transform these plans into profitable, sustainable and, viable long-term growth projects, thus representing a model of social mobility with direct impact in their next generations.

But why is this social transformation so important, and how did they see an opportunity to open up a space in this niche?

First, two particular problems that the country was undergoing during that time were identified: 1. Most small businesses did not have access to financial credit, nor financial services as a company. They almost always had access as a “natural person”, as the owner, to support him with his personal assets, but hardly as a small company, and only achieved ownership once he had some time of evolution.

The consequence of this situation ends, hopelessly, in the person involved opts for the lesser evil: Solve his status, either through the well-known ‘payday’’ or ‘drop by drop’, to whom what he owes can go so expensive that they end up paying even with life; the family member or close friend, who often intends to

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situation interests them, and worries them. And, although BankaModa is a fintech, to achieve this goal they decided to break the mold by visiting its customers instead having their customers come to them. It is in this way, as they have a pool of advisors, not armies, who are approachable, generating the trust that is required for such a product, which no one knew about and with which a logical mistrust is generated until it builds Ebitda del total de empresas que strength. Flexible, because once its assimilated 2. There were no services targeting that reportaron a Supersociedades en cada año thatEbitda this industry works differently from the niche.

Banking was always intended for all Cifras en millones de pesos Margen others, 8,9% you can work with custom made models, industries, for all sectors, with very universal 2009 837 8,6% and not based on customer’s cash flow8,6% situation, products and for all segments, making 844 2010 massive. Thus, BankaModa has the luxury, or size the only differentiator: SB banking, 7,9% 7,8% 1.703 Thus, 2011 better yet, provides its customers with the luxury corporate banking, personal banking...

7,5% of having grace periods in capital knowing that, understanding the sector’s 2012 1.097 dynamics and the 7,0% gaps of those who work for it, was decided6,9% if they are being given customizable tools, and if 1.198 2013 6,7% the customer is paid, above having ability to pay, to create a banka in which customers could 1.386 2014 it becomes ideal to fulfill their obligation and, have access to something simple, reachable, 1.624 2015 therefore, the probability of accident decreases flexible and fast. From those four principles 1.499 dramátechnically. And lastly, agile, a fundamental will 2016 be the beginning of everything.

1.463 2017 virtue now-a-days in all business models. In BankaModa’s case its considered that in that Simple, to the extent that accessing a credit time-span they are diametrically opposed to with them would not be cumbersome.

“The Utilidades netas del total de empresas que reportaron a Supersociedades en cada año common banking and have greatest opportunity processes simpler and with a language for Margen Neto Cifras en millones de pesos for growth because they manage, through an everyone tend to be better accepted and more 3,3% 638 effective model, to break the customer’s anxiety successful,” says the founder.

So, they decided 429 386 405 390 348 285 2,7% 232 and give them timely2,5% answers adjusted those to create 92 an easy to fill application format and 2,3% 1,8%companies. 2,0% required by the But2,0% how do they made this the only requirement to credit access.

2,5% achieve this? Through an extensive network They face, among other things, less friction than 0,8% of allies that facilitate the customer knowledge in traditional banking where high frustration is processes giving an answer within 48 hours generated in this type of processes. Close or being it favorable or not. neighbor, based on the idea that your clients’ 2017

2017

2016

2016

2015

2015

2014

2014

2013

2012

2013

2011

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take advantage of the situation by acquiring part of the busines, or the traditional bank itself, with the obstacle that its products do not fit the extent that the customer requires, or that the waiting times are much longer, the processes more strenuous, or even that when they see them small they try to be vulnerable and apply protectionist models.

Así lo hace Bankamoda

Cliente accede al sitio web: www.bankamoda.com

Diligencia solicitud en línea y la sube al sistema

Aprobación

BankaModa hace recepción y estudio del crédito

Formalización de la operación virtual

Envío de pagaré PDF

Procesos complementarios: llamadas y visitas

Desembolso

Comité de crédito: firmas de autorización complementarias

Gestión de cartera

Documentos para tener en cuenta al momento de realizar la solicitud Adjunta información del negocio y proyecciones RUT Cámara de Comercio

Declaración de renta C.C. Representante legal Extractos bancarios

64 | EMPRESAS FINTECH EN COLOMBIA

Documentos especializados del sector Estractos en línea

Pagos electrónicos

Pagos B.I de la operación

BANKAMODA DOESN’T LEND MONEY María del Mar Palau’s opinion is that credit business is a commodity, the activity as such is exactly the same as that it could exercise a payday, traditional banking or BankaModa.

However, there is a main difference, it really lies is in the connection with the client. “People seek effectiveness and also a level of complicity when it comes to an adverse situation because that’s what traditional banking is not able to accomplish. When you start showing that you’re struggling with a traditional bank, the regulatory bank starts shortening the deadlines to try to meet obligations faster,” She argues. BankaModa aims to develop relationships with its clients

based in trust, breaking the paradigm of ‘more risk, less term’ is torn down. Whether granting a credit of 0 million or one of 100 million pesos, its creators bet on a concept far from Westernism and more in line with the Eastern mindset, in which it is assumed that the more vulnerable the stage of development of a company, the longer and better conditions must be granted to ensure that it can be paid. “It has worked well for us, you give a product at a looser quota so that people have more time, and suddenly, one day you get paid half the capital because they had the opportunity to do it, because they want to have a product with you again, because they want to generate credibility, hence that serves a lot more than drowning people with high quotas,” she says.

Velocidad, una promesa cumplida.

Proceso de solicitud de crédito Promedio de respuesta a un estudio de crédito Riesgo de pérdida

24 a 48 horas

Banco tradicional

5a6

semanas

Menor por parte de quien solicita el crédito

Mayor por parte de quien solicita el crédito

Desmbolso

72

Promedio final de tiempo de espera

horas

1 semana

10

6a8

días hábiles

semanas

BANKAMODA |

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THE IMPORTANCE OF THE PAYMENT CHARACTER FOR BANKAMODA One thing that sets BankaModa apart from other fintechs is that it uses subspecialized algorithms for different segments in order to understand its customers. For instance, for bonded assembly plants there is an algorithm; to study those of national own brand, another algorithm; for exporting own brand, another, and so forth... In short, the qualitative dimension is almost 60% of the weighting of the risk model, this being broader than that of the financial statements. In such a way that this bank has concentrated on measuring the variables of the payment character, which allows to analyze how much the customer will respond positively to an adverse situation, and how feasible it is that the

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customer will communicate beforehand about that situation before it happens. The head of the organization admits that for BankaModa is more important the character than the ability, “the reason is because someone who has the money, and does not want to pay it back to you, still will not give it to you and will disappear; but whoever wants to pay it back and doesn’t have it, will find a way to give it back to you.” If there is one thing BankaModa is proud of while building relationships with its customers, is that those who have already purchased a service do want to earn the right to repeat. So, you know, that is only achieved if you prove yourself to honor the debt. “We do have people who want to pay us,” Palau takes pride. There is an emotional ties difficult to find with traditional banking that, quite the contrary, generates distances, frictions and a feeling of non-repetition, a barrier that plays in favor of this banka..

SATISFIED CUSTOMERS “I believe I’ll marry BankaModa”:”: Rubiela Cubillos, owner “Manufacturas Elegancia con Calidad” I had a credit with a traditional bank and due to a mistake, we forgot to pay the quota, and when I realized the company had already been reported, and therefore I was too reported in Datacredit. I stayed reported for almost a year.

After that experience I tried to take out credits at two additional banks and they rejected me, then I approached BankaModa and had no trouble at all, they approved a credit for 60millions, I thought it was great. The coolest thing is that after a year the quotas were 5 million long. I got scared, but I said,” I can” and thank God I could. The best thing is that in a year I wasn’t owing anything. It isn’t like with the traditional banks that you pay, pay and pay and my God, when it’s going to be over. I liked it so much that that’s why we renewed it for 80 million. When I get caught up with them, the person I always talk to at BankaModa tells me: “Rubi, I’ll recommend you to cover the quota”... but I try not to hang myself, to handle this well.

Communication with them is completely different from the one you have with a traditional bank. As an example, when I need the girl, she is always available. There is like more confidence. I think when they get to be known more, they’d have inconveniences with a lot of banks.

“So much beauty can’t be real. But it was:” Carolina Herrera, owner of “La Camisería” We are clothing manufacturers of shirts for wholesalers, we distribute wholesale. Initially BankaModa was recommended to me by a manufacturer, told me that there was a new company that was financing projects related to textiles, and clothing entrepreneurs. At first, I didn’t pay any attention because I understood that BankaModa was just for fashion, and since the textile sector is seasonal and so strong, then we thought it wasn’t for us. But then we took on the task of researching who they were, and then

we knew we did fit. We started with them because we were needed to grow. We tried to knock on Bancolombia’s door, but they asked for a lot of things. We knew we had a lack of them for being young. In the end, with BankaModa we have seen many positive things: they knew the sector, banks do not. For banks, a referral does not exist, for BM it does. For banks that one sells half billed and half remissionated is already wrong because they only look at what one can report in taxes and this business doesn’t work many times like this. So, we really liked that they take into account all the revenue. BM does know the sector and the fact that they know what our business is like, it makes it easier for them and us to do everything. They have the smell and know where they put their money. In addition, banks only group companies according to size, and often advisors have no idea about our business, they don’t give you the importance because, in addition, there are many companies, and they don’t give you time. And, unfortunately, this is moments, opportunity. This is from “I have an inventory to buy now: take it or leave it”. When the BM adviser told me they have a week’s response times, I smiled because that never happens. You know a credit study takes time. But, oh, surprise it was a week! And it was even so easy that gave me distrust. I was like, “So much beauty can’t be real.” But it was. Obviously, they came, visited us and told us they believed in us. In this sector there is so much professional jealousy that BM has become an Ace up my sleeve and, honestly, I wouldn’t want my competitors to find out about them because they’re going to have the same opportunity that I had and it becomes problem for me. *** Encouraging people to grow, change traditional paradigms, make a business in non-formal fashion, a visible company are some of the purposes it has in the BankaModa scope. A fintech who is not afraid to believe in small ideas because understands the need to take the right steps. In short, betting on the future of the niche of fashion in Colombia, BankaModa invites those who have not yet dared to give their projects the place they deserve, either out of fear, or for the obstacles they have had to overcome along the way, to think big, and don’t allow window of opportunity pass by, and to finally achieve what they have proposed.

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100% online loans, personal loans up to Col$ 750,000

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RAPICREDIT THE NEW GENERATION OF FINANCIAL SECTOR

According to figures from the World Bank, around 2.5 billion people do not use formal financial services and 75% of the poor do not have a bank account. Inclusion is key for reducing poverty and promoting prosperity. In Colombia we have the challenge of financially including more than 6 million people, for this there are companies such as RapiCredit that contribute to reduce the gap between those who can obtain a loan and those who do not, through quick and shortterm personal loans. It is one of the 03 young companies of fintech located in 15 of the 18 1 countries of Latin America .

This company is in a constant process of research and development, to structure and launch financial credit products aimed at the Colombian 1 Source: Fintech- Innovaciones que no sabĂ­as que eran de AmĂŠrica

Latina y Caribe. (Finovista - BID. 2018)

citizens making easier and better their customer experience; in this way, it meets the needs for a good part of the population who did not have a direct loan service before. Therefore, the company finds more value in the information that it gets from its customers that in the amount of money that it moves in loans, since it allows it to be more efficient and effective when proposing new products and ways of interacting with them.

It has managed to put into circulation in the formal economy more than 200 billion pesos in loans; loans that have paid taxes and that have allowed many people from strata two and three overcome emergency situations through a legal system. It currently grants more than 30 thousand online quick loans per month and in almost 6 years of operation it has managed to reach more than 580 thousand credits that have made life easier for thousands of Colombians.

RAPICREDIT |

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RAPICREDIT THE FUTURE OF THE FINANCIAL SECTOR IN COLOMBIA IS NOW! The future generations of the country will have a relationship with the bank as they have it today with other components of their daily life, like commerce and entertainment. This futuristic claim for Colombia comes from observing what is happening now in the world, in places where consumers’ and consumer’s relationships with financial entities are forcing traditional proposals to be transformed to keep up with them.

In the United States, malls construction projects have seriously decreased and it is estimated that in less than three years, 25% of the existing ones will close definitively due to the oversupply, obsolescence and rise of e-commerce.

Music, games, television and cinema through online platforms, are presented as the strongest options for the new generations, who prefer contact with these forms of entertainment, above of traditional options that require travelling and personal interaction.

About 42% of bank offices in Spain had closed for year 2018, since their consumers preferred to make their transactions digitally and only a part of them, an increasingly smaller “generation queue”, opts to stand in lines or wait turns to be attended by the entities officers.

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Perhaps saying that traditional Colombian banking as we know it is going to disappear completely, is not totally accurate, however it can be said that there will be a migration of their operations towards digital and that those who have a strong technological adaptation, will probably survive; that means, the entities that choose to be more similar to what RapiCredit is today —and of course, other fintech entities— will be the ones with the most options to project into the future.

A financial business, with a social basis RapiCredit purports to provide through technology, dignified, agile and legal opportunities to face monetary emergencies, to Colombian citizens of legal age, of strata two and three anywhere in the country and who have, as a minimum requirement, a bank account.

It was born as an idea at the end of 2013, from the union of two restless minds, eager to undertake and to put into practice a business idea of ​​their own, everything they had learned in their travels through the world of factoring and insurance.

Daniel Materón and Juan Esteban Saldarriaga, friends and former co-workers at a well-known worker’s compensation insurance company (ARL) in Antioquia, decided to create a “startup” in the lending category. After analyzing several options and scratching a couple of sheets of paper, in which always one idea stood out: Colombia needed a loan proposal for the least favored communities.

Our clients decide how much money they need and the period of time to pay

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By that time the country was passing through a transformation and there was a unique opportunity, because the World Bank and the Government were promoting a financial inclusion program as a mechanism for developing the society, especially in sectors with less quantity and quality of opportunities. Financial inclusion is a development lever for countries, because with its implementation in Africa, Central and South America it promotes economy boost and reduces poverty rates.

While the idea of ​​creating a company and generating wealth is one of the main purposes of any entrepreneur, probably nothing motivated and continues motivating this pair of entrepreneurs, that the idea of ​​offering access to loans for the least favored populations, so that they can acquire goods that improve their quality of life and have access to services such as education, which turn out to be ways to improve permanently and definitively their inequitable condition. The impact social of such a company is deep and very necessary for a society like ours.

Another motivation and added pride from this operation, is that this fintech proposal aimed at the inclusion and financial deepening of the Colombian middle and lower classes, manages to displace illegal options known as “daily payment” or “drop by drop “ and formalizes the access to loans for underserved populations or with little attention by the traditional financial system.

What lies behind a lending Although at first glance the business of RapiCredit appears to be the loan of money through an easily accessible digital platform, its scope is much deeper and more extended when viewed from the correct point of view. The benefit goes much further of the economic aspect in the short term by the collection of interests on each transaction added to the social impact discussed earlier.

The real business behind its operation lies in two fundamental things, collecting information from its consumers and the financial education it provides.

While traditional banking worries for analyzing specific data about credit history and current financial situation of a borrower to conclude

72 | EMPRESAS FINTECH EN COLOMBIA

whether he is eligible or not; fintech companies, due to their technological nature, have access to crossed information through big data, which provides the ability to analyze through algorithms, not only the financial evolution of its customers, but important aspects of their life, facilitating the analysis of the customer’s needs.

For example, if a customer five years ago made a loan to pay his degree fees in college, two years later he borrows another to pay a vehicle fee, and a year later, he borrows to pay his honeymoon, by data analysis, it can be anticipated to offer a loan for the preparation for the arrival of a newborn child next year, or perhaps, for buying a property.

In this way, the company has the possibility to anticipate and take the first step, and the client will know how appreciate the offering.

With regard to financial education, the platform of access to RapiCredit services gives the possibility of receiving formal information, regarding the correct way to achieve financial “good health” turned into tips and advices for the proper management of personal finance, promoting the importance of savings, the rational use of loans and even it provides the client with a tool for managing his income and expenses budget.

Furthermore, the interaction dynamics of the operations, the effect of its behavior and the generation of cross-sectional data that create a credit history, provide practical training.

The benefit of this type of education is prolonged and ends up creating a long-term relationship between the company and the user, but more importantly, it enters a consumer of financial products into the entire system, which in the end benefits the general economy of the country.

The challenges of RapiCredit The first of course is to continue with the consolidation work of the company in the fintech environment in the country, with a view to become the best option for quick loans for the most vulnerable populations in the national territory, as well as expanding its services in Ecuador, Peru and some other Central American countries, through various alliances with private banks and investment funds.

RAPICREDIT EN CIFRAS

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The next challenge is the integration of its proposal to the present financial transformation of Colombia. Banking is developing financial inclusion, as digital platforms like Facebook and Google do, which are committed to that issue. So understanding the position and the role that is going to be played in a game board is one of the main challenges of any fintech entity.

Finally, there is a security challenge, because the digital financial world, for its nature, poses its own risks. So, Data protection is an issue that RapiCredit has as a priority in its agenda and for that, efforts are focused on research and development of new technologies, to make customers feel confident.

In this 2020, strategic alliances have been made with companies of goods and services, which will allow to fulfill the main purpose of RapiCredit, the creation of complete loan solutions to cover needs that improve consumer’s quality of life and the acquisition of products through loans.

Passion for the association Juan Esteban Saldarriaga, one of the founding partners of the company, in addition of being a restless entrepreneur, is passionate about the idea of teamwork. This “hobby” led him in a story before RapiCredit, to create the Colombian Association of Factoring (Asofactoring) and the positive experience of said association, motivated him to create an entity in which competitors in the fintech world could work around the possibility of sharing experiences, work on selfregulation issues, regulatory issues and all those possibilities that would allow the fintech industry to grow in an orderly manner in Colombia, to the benefit not only of the associated companies, but also of the final consumer.

Thus, the Asociación Colombiana de Empresas de Innovación Tecnológica y Financiera : Colombia Fintech (Colombian Association of Technological and Financial Innovation Companies) emerges.

At first, thirteen companies met with this purpose in November 2016; by the beginning of 2020, there are almost two hundred companies in this association, there are even eleven financial regulated entities, the most important banks in the country are within the association

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and working tables have been created around payment systems, credits, factoring, legal issues, digital identity, which have brought great benefits and enormous rewards.

The greatest challenge of this association is to find innovation and flexibility mechanisms for its operation without involving the financial system, because Colombia is a historically conservative country in its regulatory issues and for now, from the legal and political point of view, this is one of the most important challenges of its mission.

RapiCredit has worked closely with the association to strengthen the sector, to fight against illegal loans and help the Colombian population to improve their quality of life and their credit history, through short-term loans currently granted to its customers and soon with long-term and larger loans, which will cover some needs specific to them.

Fintech from Colombia, to the world In 2017 Juan Esteban was invited to travel to Spain to get to know the Asoaciación Española de Empresas Fintech e Insurtech (Spanish Association of Fintech and Insurtech Companies), which at the time already had two years of experiencee. During that visit, a friendship was formed and they began to talk about the possibility of creating an IberoAmerican network of Fintech companies, and quickly they started talking about Mexico, which is currently the Latin-American country with the highest number of such companies.

By 2020 the Ibero-American Fintech Association was composed of 13 associations and 23 countries. They are in the process of creating a legal status for a non-profit company in Panama.

They have a board of directors that changes the country every year: in 2019 it was in charge of the Brazilian association, by 2020 it will be Colombia who bears the responsibility.

Their challenges and achievements focus on topics of overall interest in the region, such as digital identity, insurtech, what the regulatory sandbox should be and it is working with the Inter-American Development Bank IDB, in the

EQUIPO RAPICREDIT Andres Rubiano Chief Financial Officer Economist with a master’s degree in finance, with more than 11 years of experience in corporate finance.

Ysamar Meza Chief Risk Officer Mathematician with a master’s degree in Analytics for Business Intelligence, with 6 years of experience in the development of analytical solutions, focused on the credit cycle.

Liliana Andrade Chief Operating Officer Systems Engineer with Specialization in Operations and Production Management, more than 9 years of experience in e-commerce and fintech.

Daniel Materón Chief Executive Officer.

Systems Engineer with several specialties such as marketing and sales, he is the founding partner and executor of the rapicredit strategy.

Sebastian Arenas Chief Technical Officer.

Systems Engineer with specialization in IT and MBA candidate, more than 15 years of experience leading teams

Luisa Martinez Chief Marketing Officer.

Business Administrator specialized in strategic marketing and more than 10 years of experience in digital marketing.

Maria C. Castro Customer Service Agent Industrial Engineer with a master’s degree in marketing, 8 years of experience in the design and execution of sales strategies, guaranteeing an adequate customer experience.

Diana Zapata Product Manager Industrial Engineering with more than 8 years designing commercial strategies and developing projects aimed at technological innovation for the financial sector.

www.rapicredit.com

regional public good initiative. So, this alliance becomes an additional instrument so that each of the local associations legitimize and regulate their initiatives and operations in each country to become macroregional.

To end this chapter of RapiCredit’s Goodwill, it remains to be said that the main component of its work team, which by 2020 has almost 80 people, is professionalism and optimal competencies required for performing each function, but each and every one of them is a human being with a high degree of social sensitivity. Those two ingredients are key for being part of the team, otherwise, the attention of the thousands of customer attended every day would be outside the philosophy with which the company was created. RapiCredit despite being a young

organization, has relevant elements that lead it to grow up in its corporate governance and it understands that a good governance is a key to the operation of any company and the professional performance of its administrators and executives. They work to incorporate the corporate culture and internal functioning of good practices without neglecting strategic management and operational efficiency.

Its appreciation for populations traditionally underserved by banks, is what drives them, because that appreciation is the one that ultimately allows to receive a value greater than money for the operations carried out, and that is: the enjoyment of social impact produced by each of the loans.

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We are a global information and knowledge company that builds trust between companies and consumers so that both act safely in the market

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FINTECHS IN TRANSUNION At TransUnion we have ten years of experience working with the FinTech industry around the world. In the United States and the United Kingdom, we were partners with FinTechs since their inception, when the FinTech world was still considered a novelty. We are participants and witnesses to the transformative effect that FinTechs have had on the financial services industry in these developed markets and how they established themselves as relevant competitors in their sectors.

From the United States and the United Kingdom, TransUnion’s efforts with the FinTech industry have expanded around the world. Today FinTechs have dedicated resources at TransUnion whose objective is to identify, shape and satisfy the particular needs of FinTechs in terms of data,

analysis, innovation, speed, solutions and technology. Today we have exclusive teams to work with FinTechs in ten countries: United States, United Kingdom, Colombia, Canada, Brazil, India, Hong Kong, Philippines, South Africa and Kenya.

Although in recent years most FinTechs have defined growth as their main objective, today there is a greater interest in the profitability of this industry. The acquisition of clients as an expansion mechanism continues to be key within the life cycle of FinTechs; however, the focus on profitability has become decisive to guarantee its sustainability. Today, more selective capital investments are made in order to –in addition to growth– generate profitability.

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MYTHS AND REALITIES: POPULAR BELIEFS ABOUT FINTECHS At TransUnion we developed a study to evaluate various hypotheses about FinTechs. For example, it tends to be assumed that FinTechs primarily attract younger consumers, that they cater to unbanked consumers, and that they are tech companies with unsophisticated credit strategies.

In the United States, the TransUnion data shows that all these hypotheses are false: FinTechs that grant credit in the United States provide services to a large number of consumers of different ages who have a high level of access to credit, similar to the clients of the traditional banks. In addition, they employ more robust credit risk strategies compared to the traditional credit market, since they take into account more variables and alternative data to make their decisions and personalize their offers (for example, designing price structures and differential rates based on the risk).

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When analyzing the data in a less developed market like India we find that some of the hypotheses are beginning to come true. In India the FinTech consumer tends to be younger and less experienced in the credit market than the traditional bank consumer. However, FinTechs in India are not unsophisticated: they have very effectively entered the segment of short-term loans and smaller amounts and have surpassed other entities in terms of market share in just two years.

How is the FinTech market in Colombia?

As in India, FinTechs in Colombia serve young consumers and offer short-term loans. However, they are aimed at consumers with experience in the credit market: at the time of accessing a FinTech loan, 57% of consumers already had a payroll loan and 64% a credit card.

On the other hand, our data shows a similarity between the FinTech and Retail sectors (industry and trade sector) in terms of consumer and credit profiles. Both FinTech and Retail entities (Industry and Trade) grant loans of COP 1 million on average, with a term of less than 12 months and to consumers under 35 years of age.

Information can help develop industry, facilitate business and improve people’s living standards TRANSUNION |

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¿Cómo es el mercado FinTech en Colombia? ¿Cómo es el mercado FinTech en Colombia?

Al igual que en India, las FinTechs en Colombia atienden a consumidores jóvenes y ofrecen créditos a corto plazo. Sin embargo, se dirigen a consumidores experiencia en el mercado de crédito:jóvenes al momento de acceder Al igual que en India, las FinTechs con en Colombia atienden a consumidores y ofrecen créditos a corto a un crédito FinTech, el 57% deselos consumidores ya tenía unexperiencia crédito de libranza y el 64% tarjeta de crédito. plazo.

Sin embargo, dirigen a consumidores con en el mercado deuna crédito: al momento de acceder

a un crédito FinTech, el 57% de los consumidores ya tenía un crédito de libranza y el 64% una tarjeta de crédito.

Por otro lado, nuestros datos muestran una similitud entre los sectores FinTech e Industria y Comercio en términos de perfiles de consumidores y créditos. las entidades comoFinTech Retail otorgan créditos de $1 en Por otro lado, nuestros datos muestranTanto una similitud entre FinTech los sectores e Industria y Comercio millón de pesos en promedio, un plazo menor a 12 meses y alas consumidores menores de Retail 35 años. términos de perfiles con de consumidores y créditos.

Tanto entidades FinTech como otorgan créditos de $1 millón de pesos en promedio, con un plazo menor a 12 meses y a consumidores menores de 35 años.

Promedio de desembolso (Originaciones 1er Semestre 2019)

TransUnion’s credit assessment tools aimed at the FinTech ecosystem are based on trend data Al igual que en India, las FinTechs en Colombia atienden a consumidores jóvenes y ofrecen créditos a corto 11.880 plazo. Sin embargo, se dirigen a consumidores experiencia en el mercado de crédito:jóvenes alFinTech momento de acceder Al igual que en India, las FinTechs con en Colombia atienden a consumidores créditos a corto alternative data, offering new perspectives Bancosy ofrecen and FinTech a un crédito FinTech, el 57% deselos consumidores ya tenía unexperiencia crédito de libranza y el 64% una tarjeta de crédito. plazo.

Sin embargo, dirigen a consumidores con en el mercado deOtras crédito: al momento de acceder entidades Bancos y Otras Comercio a un crédito FinTech, el 57% de los consumidores ya tenía un crédito de libranzaIndustria y el 64% unaentidades tarjeta de crédito. on consumer behavior.

Cooperativas 4.248 Industria y Comercio Promedio de en desembolso (Originaciones 1er Semestre 2019) ¿Cómo es el mercado14.504 FinTech Colombia? ¿Cómo es el mercado FinTech en Colombia?

14.504 11.880

Por otro lado, nuestros datos muestran una similitud entre los sectores FinTech e Industria y Comercio en Cooperativas 4.248 términos de perfiles de consumidores y créditos. las entidades como Retail otorgan créditos de $1 en Por otro lado, nuestros datos muestranTanto una similitud entre FinTech los sectores FinTech e Industria y Comercio 1.139 1.044 un plazo menor a 12 meses millón de pesos en promedio, y alas consumidores menores de Retail 35 años. términos de perfiles con de consumidores y créditos. Tanto entidades FinTech como otorgan créditos de $1

Every day it is possible to screen more consumers who do not have a traditional credit history and Promedio de desembolso (Originaciones 1er Semestre 2019) Sin embargo, las FinTechs asumen más riesgo crediticio en comparación con otros sectores (incluyendo el sector Promedio de desembolso (Originaciones 1er Semestre 2019) de industria y comercio).

Los datos de la industria del primer semestre de 2019 evidenciaron que la mitad de los Sin embargo, las14.504 FinTechs asumen más riesgo crediticio en comparación con otros sectores (incluyendo el sectoridentify the least risky among populations that créditos dede libre inversión emitidos por seindustria otorgaron perfilessemestre de alto riesgo, mientras que la que mayoría industria y comercio).

Los FinTechs datos de la dela primer de 2019 evidenciaron la mitad de los 14.504 de los créditos tipo de Retail seinversión otorgaron a consumidores de riesgo medio. a Por otro lado, las riesgo, cooperativas de que la mayoría créditos libre emitidos por FinTechs se otorgaron perfiles de alto mientras were previously considered high risk. Through However, FinTechs take on more credit risk 11.880 crédito, losde bancos y otrastipo instituciones financieras se concentraron consumidores bajo riesgo. los créditos Retail se otorgaron a consumidores deen riesgo medio. Pordeotro lado, las cooperativas de crédito, los bancos y otras instituciones financieras de bajo riesgo.

11.880 se concentraron en consumidoresFinTech TransUnion tools, FinTechs can contribute to compared to other sectors (including the Retail Distribución por riesgo (primer semestre de 2019) Bancos FinTech 100% Distribución por riesgo (primer semestre de 2019) Otras entidades Bancos expanding access to credit by controlling risk sector).

Industry data for the first half Industria of 2019 100% y Otras Comercio entidades 75% Cooperativas 4.248 Industria y Comercio and contributing to the development of a more showed that half of the free investment credits 75% Coop Otras entidades FinTechs I&C Cooperativas 50% 4.248 Bancos Coop FinTechs dynamic and formal economy. issued granted to high-risk Otras entidades I&C 1.139 1.044 50% by FinTechs were Bancos 25% 1.139 1.044 profiles, while the majority of Retailtype credits 25% 0% *Valores expresados en millones de pesos colombianos Riesgo altogranted Riesgo medio Riesgo bajo Riesgo medio -to alto In a growth strategy, access channels are a were medium-risk consumers.

0% *Valores expresados en millones de pesos colombianos Otras entidades Industria Riesgo alto BancosRiesgo Riesgo medio Cooperativas Riesgo bajo FinTechs medio - alto & Comercio Sin embargo, On las FinTechs más riesgo crediticio comparación con otros sectores (incluyendo el sector Bancos en Otras entidadesunions, Industria Cooperativas FinTechs fundamental pillar. In recent years, the expansion theasumen other hand, credit banks, and & Comercio de industria y comercio).

LosFinTechs datos deasumen la industria primer semestre de 2019 evidenciaron que la mitad de los el sector Sin embargo, las más del riesgo crediticio en comparación con otros sectores (incluyendo créditos dedelibre inversión emitidos por FinTechs se otorgaron a perfiles de alto riesgo, mientras que la mayoría other financial focused on low-risk industria y comercio).

Los datosinstitutions de la industria del primer semestre de 2019 evidenciaron que la mitad of de losdigital channels has allowed entities such as de los créditos tipo de Retail otorgaron a consumidores de riesgo medio. a Por otro lado, las riesgo, cooperativas de que la mayoría créditos libreseinversión emitidos por FinTechs se otorgaron perfiles de alto mientras crédito, losde bancos y otrastipo instituciones financieras se concentraron consumidores bajo riesgo. los créditos Retail se otorgaron a consumidores deen riesgo medio. Pordeotro lado, las cooperativas deFinTechs to reach more consumers, becoming consumers. crédito, los bancos y otras instituciones financieras se concentraron en consumidores de bajo riesgo.

Distribución por riesgo (primer semestre de 2019) attractive to the youngest, the still unbanked, and 100% Distribución por riesgo (primer semestre de 2019) facilitating access in geographic areas without 100% 75% physical coverage from traditional financial 75% Coop Otras entidades FinTechs I&C 50% entities. The challenge today for FinTechs is to Bancos Coop Otras entidades FinTechs I&C 50% Bancos continue expanding their presence in the digital 25% 25% world with greater security.

0% 1.139 1.044con un plazo menor a 12 meses millón de pesos en promedio, y a consumidores menores de 35 años. *Valores expresados en millones de pesos colombianos

% acumulado de originaciones

% acumulado de originaciones

% acumulado de originaciones

% acumulado de originaciones

*Valores expresados en millones de pesos colombianos

Riesgo alto Riesgo medio Riesgo bajo Riesgo medio - alto 0% Otras entidades Industria Riesgo alto BancosRiesgo Riesgo medio Cooperativas Riesgo bajo FinTechs medio - alto & Comercio Bancos Otras entidades Industria Cooperativas FinTechs & Comercio

FinTechs as an engine of financial inclusion in the country In Colombia, FinTechs contribute to the financial inclusion strategy with a multidimensional approach to assessing consumer risk. By leveraging the use of tools and technology, they can expand their universe of consumers and thus reach segments traditionally underserved by the traditional financial sector.

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Remote Channel Origination: Keeping fraud under control without sacrificing customer experience From the point of view of risk management and in the context of digitization, the great challenge for FinTechs today is to face the threats of impersonation and transactional fraud.

Today the entities that provide services through digital channels must offer a strategy that is robust to combat fraud and at the same time

friendly, simple and secure for their clients. The challenge of balancing risk and benefit is great and fortunately there are ways to overcome it.

fundamental is to link the traditional validation of people’s identity with the validation of what we now call “digital identity”.

Leveraging on anti-fraud intelligence based on information from the electronic device (mobile phones, tablets, computers, and any other device connected to the internet) is important as it becomes the preferred platform for consumers (and also for fraudsters) .

New to Credit consumers, a segment to explore

According to data from iovation®, a TransUnion company, last year 51% of the online transactions of financial services entities were carried out through mobile devices (compared to 49% through desktop computers).

At the same time, the suspicion of fraud via mobile devices in the financial sector has increased: the percentage of transactions declined due to possible fraudulent behavior within the financial sector customer segment doubled, jumping from 21% (2017) to 41% (2018).

Fraudsters frequently build their identities and credit profiles using specific devices.

Therefore, identifying fraudsters through their mobile devices is essential to prevent the proliferation of fraudulent identities and associated losses.

So, what can FinTechs looking to expand their presence in the digital world do? Essential is ensuring that their fraud prevention processes and technology are aligned with their strategy.

This usually implies adopting modular, integrated and scalable solutions that provide different levels of security adjusted to the risk being evaluated, without affecting the customer experience.

In terms of authentication, there are tools for the validation of identity documents and facial recognition, which allow contrasting images that the person can capture with their cell phone and analyze them, associating them with the risk of fraud associated with the device to reduce the risk.

From our experience in developing information solutions to fight fraud, we know that something

New to Credit consumers are defined as those who obtain their first credit risk score. These present a challenge for lenders due to the lack of traditional credit information in their credit histories. They are often perceived as riskier, and their credit needs may not be properly understood.

In the first study carried out by TransUnion in Colombia on New to Credit consumers, it is observed that since 2015, more than 1.5 million people annually enter the Colombian credit market and obtain their first credit risk score (around 5% of the country’s total adult population).

Credit institutions seeking organic growth should pay attention to New to Credit consumers This study shows that only 2% of New to Credit consumers had a first credit score in the higher risk range (“subprime”) compared to 19% of the established credit population. The vast majority (82%) of New to Credit consumers were in the medium-high risk category (“near prime”), a range above subprime, in the month in which they acquired their first score.

In addition, many of those consumers who started their formal credit history with a near prime risk score advanced to a lower risk range (better score) in the next 12 months: although New to Credit consumers had more volatile scores and therefore more likely to see their initial scores change over a 12-month period versus established credit consumers, the study showed that a significant percentage of the changes in New to Credit scores were positive rather than negative.

These and other findings from the study show the ability of many New to Credit consumers to improve their initial credit scores relatively quickly by managing the first credit accounts

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well and making timely payments. The stability or improvement of the risk score of the vast majority of New to Credit consumers provides confidence to the FinTech ecosystem to enter this segment.

For these consumers who are just beginning their credit life, as well as for those who do not yet have a score, TransUnion has developed solutions that allow to qualify up to five million

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additional consumers who today do not have a traditional credit history and complement internally developed models by some FinTechs.

At TransUnion we are participants in the advances led by FinTechs and we work hand in hand with the sector to move rapidly towards greater financial inclusion in Colombia.

Somos una compañía global de Somos una compañía global de Soluciones información We are a globalde company of Soluciones de información INFORMATION SOLUTIONS

TransUnion es una compañía global de soluciones de TransUnionque es una compañía global deconfianza soluciones de información contribuye a generar entre TransUnion isque a global information solutions company información contribuye confianza entre entidades y consumidores en alagenerar economía moderna. that helps ybuild between entities andmoderna. consumers entidades consumidores en la economía Logramos esto al trust proporcionar una imagen completa de in the modern economy.

Weuna accomplish this byde Logramos esto al proporcionar imagen completa cada persona para que pueda ser representada de providing a complete of each person so cada persona para quepicture pueda representada de that manera confiable y segura en elser mercado. they can be reliably and en safely represented in the manera confiable y segura el mercado. marketplace.

TransUnion proporciona soluciones que ayudan a crear TransUnion proporciona soluciones que ayudan a crear oportunidades económicas, grandesthat experiencias y TransUnion provides solutions help create oportunidades económicas, grandes experiencias y empoderamiento a millones de personas en más de 30 economic opportunity, experiences empoderamiento a millonesgreat de personas en más deand 30 países.

Llamamos a esto Información para el Bien®. empowerment foramillions of people para in more than 30 países. Llamamos esto Información el Bien®. countries. We call this Information for Good®.

Conozca LConozca EARN MOmás: Rmás: E: www.transunion.co www.transunion.co TransUnion TransUnion TransUnionCO TransUnionCO

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We are engaged in building responsible relationships, honest and trustworthy with each of our clients

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CREDISSIMO: A LEADING EUROPEAN FINTECH COMPANY IS ALREADY IN COLOMBIA

Founded in Bulgaria in 2007, Credissimo is a leading European FinTech group that utilizes innovative proprietary technology to provide instant online consumer loans. Throughout its 14 years of operations, the company has proven to be one of the fastest growing fintechs in the European non-financial banking sector: by the beginning of March 2020, the Company website has been visited by more than 4 million users looking for alternative personal financing solutions.

Back in 2010, Credissimo was among the pioneers to introduce a fully online business model, that turned it into one of the leading modern fintech companies to develop a customer-centric and environmentally friendly operations, which secured Credissimo’s position as the number

one online lender in Bulgaria, a positioning it has kept ever since.

In August 2015, Credissimo became the first business in the sector to receive a BB+ long-term credit rating certification, and a B short-term credit rating from BCRA /Bulgarian Credit rating Agency/. The current long-term credit rating has been updated to a BBB, with a stable prospective.

In January 2017, Credissimo became the first company in the world to launch a fully automated lending chatbot in Facebook Messenger. Later the same year, the Company was recognized as one of the top companies in Europe in the Alternative Finance category at the European Fintech Awards.

CREDISSIMO AT A GLANCE 1st in Bulgaria to offer near-instant approval process (next best alternative was 24 hours)

1st in the industry in the world to offer Chatbot service

Innovative new service “Pay Later” (delayed payment for online shopping)

established

2007

2008

2009

Launch of a new proprietary technology for real-time application processing

2012

2013

+ 100,000 loan applications reached

1st in Bulgaria to offer purely online lending

1st in Bulgaria to offer bill payment financing

1st in the industry in Bulgaria to be awarded a credit rating*

2014

2015

+ 1,400,000 loan applications and +140,000 Facebook followers reached

+400k followers on Viber

Expansion in Poland

2016

International expansion in Macedonia

Forbes Business Awards 2017 “Financial Sector Innovations” & “Quality of Services”

Expansion in Colombia

2017

“Favourite Financial Institution in Bulgaria” & Favourite Bulgarian Brand” Award by Mylovemarks

2018

Product diversification

“Most Innovative Company for 2015” Award by B2B Media

* Credit rating was awarded by Bulgarian Credit Rating Agency AD.

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Be perceived as an innovator in the FinTech sector in the region and a trustworthy company that customers can rely on to meet their financial requirements

OUR VISION

Migrate to the market of near prime, online customer while ensuring competitive pricing and using a more streamlined and user friendly process than that of the competition (including banks) Have employees and partners who share our goal and to constantly develop their potential to ensure that we create products tailored to fill the the gap in the market and the requirements of our customers

OUR MISSION

Provide easy and affordable access to credit to consumers across Bulgaria and improve their credit profile Offer the complete ecosystem of services related to cash financing of shopping needs including consumer finance loans, deferred payments and auto loans Develop and offer products via superior scoring and selection that are more effective than those of the competitors at prices that are acceptable to a larger group of customers

In late 2016, Credissimo started its international expansion by entering the markets of Macedonia and Poland, where it has successfully established operations, and at the beginning of 2019 the company entered Colombia, one of the biggest, thriving South American fintech markets.

“We’ve chosen Colombia as the core of our expansion in South America because in its environment we see the potential of developing new technologies that offer innovation in the fintech sector. The natural choice was also supported by the fact that the Colombian economy has been one of the fastest growing in the Latin America region in the last four years.

We have no doubts that our decision of choosing Colombia as the hub for our development in the region was right,”, Sokol Yankov, CEO of Credissimo, pointed out.

Mapa

Almost since entering the Colombian market, Credissimo has become an active member of Colombia Fintech, supporting the collaboration of all the companies within the fintech sector, aiming to establish good practices together and to improve the industry regulations.

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Credissimo entered Colombia by offering two separate lending products: Credissimo Salario: short-term single payment (bullet) credits for amounts up to $850,000 COP and а payment period of up to 30 days. This product offers a unique option for extending the payment period. In case the customer is unable to cover the full amount on the due date, one has the possibility to extend the period, paying only an extension fee.

Credissimo Plus: installment credits for amounts up to $2,000,000 COP and a payment period from 3 to 12 months. This product is one of the innovations for the Colombian market, as the Company was the first fintech to offer it in the country.

The end-to-end process, from submitting the application to receiving the money into the customer’s designated bank account takes less than 24 hours and is completely online from anywhere in Colombia with internet access, eliminating the need to visit a physical branch or waiting in line.

Credissimo’s customers are modern consumers that use technological solutions in all aspects of their daily lives. Educated and with stable incomes, these are people who want innovative solutions and value their time. Most of them are part of the Millennial generation, which is constantly looking for new and better offers from the companies. Among Credissimo’s customers,

IMPROVING CONSUMER ACCESS TO CREDIT IN COLOMBIA



Access Credit for clients who do not have the cash to meet emergency requirements

Affordability Longer tenors allow customers to limit the monthly cash flow burden vs the offer from pay day lenders

Equitable and smart risk scoring 360° risk profile based on alternative data-sources and advanced analytics. Due to advanced tool, ability to differentiate between customers better then banks and give fair assessment (not just by the fact whether they used paydays or applied multiple times)









Larger tickets Customers can meet their requirements without having to tap into multiple pay day lenders

Transparency Clear pricing and no penalties when customers prepay

Speed Quick decisions so clients have access to credit in a timely manner to meet emergencies

Reach Ability to access customers throughout the country

In Credissimo we loan up $2.000.000 CREDISSIMO |

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28%

124%

Net Portfolio growth 2018

cash granted versus collected margin in 2018

27%

>377k

2015-2018 compound average annual revenue growth

63k

95k

Cumulative number of unique customers applied for a loan

150

Number of loans disbursed increase between 2016 to 2018

Employees as of Sept 2019

73%

BBB

returning customers on an average basis from 2016-2018

Credit rating, Nov19 (positive perspective)

Striving to meet customers’ demands and exceed their expectations, over the recent years the Credissimo team has been tirelessly working on developing a series of innovative technologies.

The ability to approve applications in a matter of minutes, the AI-based scoring model, the creditworthiness analysis of the client and facilitated repayment options, among others, are some of its innovative automated solutions.

well as emerging challenges, in order to remain on the crest of the wave. Comfort and speed are some of the most important factors for the customers. No matter where they are, in a few minutes, clients can apply for a loan and get the money. In such a highly competitive environment, Credissimo shows its firm motivation to evolve, to constantly be a step ahead of the competition and to be a trend-setter, instead of a follower.

Broad international experience along with the internal top talent hiring policy prove a guarantee for such high innovation standards to be maintained.

In recent years Colombia has witnessed vast development in its fintech industry. The sector has transformed the entire loan market, thanks to its continuous digitalization, efficiency and implementation of innovative tech processes.

The constant updating of processes and the improvement of the services have generated huge new opportunities for doing business, as

As a consumer-oriented company, Credissimo is extremely close to its customers and taking into account their feedback is one of the main factors for the Company’s success. Credissimo has formed a dedicated team trained and highly experienced in market research, that carries out surveys and periodically runs analysis on the level of customer satisfaction.

there are quite a number of users of the Z generation, who have grown up in the digital technology era of Internet and social networks.

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A LEADING PLAYER IN THE CEE

TECH-ENABLED CONSUMER LENDING ARENA WITH SOLID GLOBAL POTENTIAL Leading FinTech company in Europe One of the most dynamically developing FinTech structures in the non-banking financial (NBF) sector, Credissimo strives to continuously provide innovative tech solutions to enhance its leading positions on the online lending market in Europe and around the world The Company has developed a stateof-the-art proprietary operating platform which allows a high degree of automation of the business processes on the basis of machine learning and big-data coordination Credissimo’s platform can be easily and efficiently implemented to work purely online in any country, language, currency, regulatory framework at minimized risk and cost

Scalable business model Structured entirely online, Credissimo’s business model has no reliance on a physical network or PPE to achieve growth, thus no significant future CAPEX outflow would be required to leverage the effectiveness of the model at full potential Through its fast and rigorous scoring system and automated preselection procedures with preset criteria for approvals/ rejections, the Company is capable of addressing the financial needs of customers with higher risk standing, while minimizing both risk cost and time of service delivery

Stage 1 is done through surveys offered to the users when first becoming Credissimo’ customers; Stage 2 begins when the customer has already received his loan, and Stage 3 covers the time frame after the loan has been fully repaid. That data allows for a detailed analysis of their behavior, attitude, and loyalty towards the Company, lets us measure the level of customer satisfaction and offer them the best possible service. The data is validated by representative national surveys carried out regularly by

Strong brand

One of the most highly recognized brands in the FinTech industry in Bulgaria, Macedonia, and Poland;

Growth

For the period 2015-2019 Credissimo enjoyed more than 4m website visits and granted more than 400 thousand loans, marking a significant increase year-to-year

73% returning customers over the period 2016-2019; 96% customer satisfaction based on an in-house survey;

internationally recognized agencies. Currently, Credissimo maintains 95% customer satisfaction, and 80% returning customers on the European markets where the company operates.

According to customer satisfaction surveys in Colombia: 96% of the customers say they have found at www.credissimo.co all the information and the details they needed, 94% of the respondents rated their consumer experience throughout the process positively: from sending

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SATISFACTORY CUSTOMER-DRIVEN EXPERIENCE LEADS TO AN INCREASE IN REPEAT CLIENTS

In line with the development of Credissimo’s loan portfolio and international development, the share of new customers increased consistently from 23% in 2015 to approximately 30% in the past two years

103K 95K 79K 63K

69%

70%

75% 77%

2016

2017

Granted Loans (in numbers)

the application until receiving the money, and 98% of Credissimo’s customers would recommend it to friends, colleagues, and family.

All of this data indicates that the positive trend observed in terms of customer satisfaction on other international markets is also confirmed in Colombia. Moreover, this feedback from Colombian customers means that Credissimo’s processes and innovative products are perceived in a very positive way and are highly valued.

The success comes as a result of a united and well-formed team, constantly keeping up-to-date with all the latest developments in the sector, with which Credissimo has been able to stand out for 14 years in an extremely competitive market. Credissimo employs more than 150 professionals working eagerly to perfect all the processes and services, in order to maintain high levels of customer satisfaction.

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2019

2018

% returning clients

Credissimo’s objectives are, on the one hand, to continue developing and implementing new technological solutions on the markets in which it already offers its services. It ensures that all customers who have entrusted the Company would be able to receive fast and convenient services meeting and exceeding their expectations, which only a leading global fintech company can offer. The other objective is to continue the international expansion and increase the number of new and returning customers.

The main strategy that Credissimo implements in its overall communication is a 360° integrated marketing, which aims to provide a constant and seamless connection on all channels and devices used by the customers. This approach allows the company to constantly segment and analyze communications with its users, to provide the

customer with a personalized experience and service of the highest level. Given the nature of the business, it is a very interesting fact that Credissimo has completely eliminated all types of printed advertising and fully replies on digital marketing and non-traditional communication channels.

In just a bit over a year on the Colombian market, Credissimo managed to achieve enviable recognition. Users are starting to search on their own for the brand online, which demonstrates

the confidence established in terms of the professionalism and excellent level of service of the Company. Credissimo is one of the first companies in the non-banking financial sector to create and implement an ethic code for more responsible lending and transparent business.

Ethics is an integral part of the Company’s operations and is based on the policy of maintaining clear and transparent lending rules and fair market conditions, which reinforces Credissimo’s commitment to all of its users.

CREDISSIMO’S INNOVATION-DRIVEN CULTURE In honor of its continuous efforts in the FinTech innovation sphere, Credissimo has been recognized with numerous awards by the business community

“Company of the Year 2016” for bringing innovations to lending and providing online access to financial services (“Business Lady” Magazine)

“Innovation of the Year 2016” “2016 Technological Innovation” for the successful integration of SIMO (Smart Integrated Multitasking Operator) – the first chatbot service for online loan application in the world (B2B Media) delinquency or other events that can be specified

“Most Innovative Company for the Year 2015” for launching Pay Later – the e-commerce POS financing platform for deferred payment of online purchases (B2B Media)

2017 Favourite “Financial institution” of Bulgarian consumers Received the highest rating of all online consumer lending companies in Bulgaria

“2017 European FinTech Awards” nominated in two categories: “Alternative finance” and “European Innovator of the Year 2017”, finished in top 10 out of 133 companies in the “Alternative finance” category

“Financial Sector Innovations 2017”, “Quality of Services 2017” for pioneering outstanding technological solutions, impeccable customer service incomparable user experience and aggressive Pan-European expansion (‘’The Forbes Business Awards 2017”)

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Daniel Medina, CEO de Olimpia IT

Our goal is to support companies in building new digital businesses

Grupo empresarial

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FINTECH AND DIGITAL IDENTITY IN COLOMBIA: THE FUTURE BECOMES PRESENT

There is no denying that the world is undergoing a paradigm shift in the way people interact regarding communication, modes of production, forms of work, participation, information records and, certainly, in terms of identification.

The rise of technology presents challenges that imply the convergence of everyday processes on technological platforms, resulting in a greater amount of user data being stored in the cloud every day.

This means that any kind of interaction on digital platforms leaves a mark on who we are, what we

think and what we want, which in turn brings a digital1 identity to life.

Not only this landscape offers opportunities but, as it offers benefits such as virtuality in service creation and process traceability, it also raises challenges when it comes to ensuring that whoever is on the other side of the screen is actually who they claim to be.

For this reason, the case of Fintech, understood as technological solutions around financial services, is a perfect example of digital identity’s transcendence in the XXI Century.

1 Torres Gastelú, Carlos Arturo & Lagunés Domínguez, Agustín.

(2018).

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Daniel Medina, CEO of Olimpia IT, is taking part in the transformation of nearly 1,500 companies by means of four fintech initiatives for biometric customer identification, e-contracts, e-payments and e-invoicing.

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With this in mind, identification and validation tools such as biometrics, navigation information, online reputation data and, in general, every alternative that allows a person’s historical behavior on digital platforms to be recorded is increasingly relevant.

Any approach to a digital identity must implement high standards of security and validation, that vary according to the platform, and ensure the proper use of each user’s personal data.

In Colombia, the future becomes present regards the surge of biometric facial recognition platforms and the verification of identity documents as an opportunity for companies in the financial industry, specially Fintech, not to mention all industries.

THE CHALLENGE OF IDENTITY THEFT One of the biggest problems digital platforms face in all economic sectors, and specially in financial services, is identify theft.

According to a study conducted by researchers from the Tank of Analysis and Creativity of ICT (TicTac), the Colombian Chamber for Informatics and Telecommunications (CCIT) and the Colombian Cybersecurity Capacity Center (C4) of the National Police of Colombia on cybercrime trends in Colombia, from 2017 to 2019, 52,901 complaints were filed for criminal activities, of which 8,037 were related to identity theft.

Additionally, the study also concludes that the main motivation of cybercriminals in Colombia is economic. Thus, identity theft makes up for 28 percent of the most common types of cybercrime.

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In any case, it must be acknowledged that over the last five years, Colombia has made significant progress in creating mechanisms for in-person identity verification, with alternatives such as identity verification being integrated into the biometric database of the National Registry for Civil Status.

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The rise of Fintech and the digital transformation process of banks certainly allows for a new work environment for identity verification through digital media or non-face-to-face channels.

“Sharing knowledge, co-creating and having spaces of ideation with our customers has allowed us to develop technological platforms that enable the commercial transformation of companies”

TOWARDS IDENTITY VALIDATION

DIGITAL IDENTITY CARD ARRIVES IN COLOMBIA

In this regard, the new dynamic reached by document verification on mobile devices has been well-received by the industry, as greater digital confidence is ensured through identity document verification (citizenship card, passport, among others).

Colombia has been working on a digital identity card since 2019.

This is an element that allows citizens to feel supported when digitalizing their identity and, to trust that the state and justice are in tune with this digital transformation.

Undoubtedly, biometrics has become a popular agile and low-friction vehicle in users experience through the use of facial recognition. It has created a new mechanism for the development of the so-called digital ‘onboarding’ or remote purchase of financial products and services.

This alternative will allow for further growth and deepening in the area of digital identity, as it provides citizens with a means of an electronic identification issued by the National Civil Registry that can be remotely verified by other applications.

This mechanism will also create safer ecosystems and will gradually allow for the adoption of digital citizen procedures and services.

However, it is important for the State to be able to implement interoperability, and build trust in technologies such as Digital Signatures, Digital Certification bodies, Blockchain; and any other alternatives that forward integrity, confidentiality and transparency in the flow of information.

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The current issuance of certificates and time stamps indicates that a standards-based age has begun and that it is now possible to use a fintech registration platform to secure transactions.

It is clear that digital identity will spawn confidence not only when a register is made but also when the entire operational route currently needed for rendering a service is simplified.

GREATER EFFICIENCY WITH ELECTRONIC CONTRACTS

It’s worth noting the work carried out by companies to standardize initiatives such as XRoad or Fido (to name a few), which help simplify and ease interoperability standards and attain reliable electronic authentication methods.

Today, there has been significant progress in electronic financial services being opened remotely, making processes such as the creation of a savings account faster for users.

However, it is necessary to bring forth digital banking initiatives that enhance the process in terms of timing and effort so that, at the next step, digital identities become linked to electronic transactions such as contracts, promissory notes, guarantees and amendments to contracts, among others.

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The challenge is to reduce the operational model of Fintech and the Legal Tech industry (applying technology for rendering or commercializing legal services) to make it more efficient; accomplish a vision that supports customer knowledge, their identification; and make transactions and contracts reliably in the digital ecosystem.

The opportunity is knocking, and the national software industry is fully suited to overcome this challenge by making use of international standards.

The surge of Fintech and the digital transformation process of banks allows for a new work environment for identity verification through digital media or non-face-to-face channels.

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“We are the financial partner of those Colombians who don’t have favorable credit reports, in order to help them with their life projects and thus also contribute to financial inclusion of the country. “

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EXCELCREDIT: COMMITMENT TO FINANCIAL INCLUSION

THE BEGINNING In 2013 a group of young entrepreneurs decided to establish ExcelCredit. A Colombian Fintech that offers consumer loans to those unattended by the banks.

The company started just like some of the biggest technology companies around the world: in a small house located in a small neighborhood in Bogota called Quinta Camacho. During this time, the founders managed to establish the loan origination operation in order to provide these consumer loans, the first clients were happily attended, and then they focused on growing the team in order to expand ExcelCredit nationwide.

This was even worked on from the garage at that small house.

The growing demand forced the team to move to a larger house that became the first official headquarters of the company. This was a big step for those that were part of the start-up, all the hard work and efforts was paying off and the company was progressively strengthening every day. The team was very motivated to see its dream become a reality.

At the very beginning, the Company faced significant challenges: i) starting operations in a market with important, large players, ii) the mistrust of government institutions in non- banking companies, and iii) the lack of knowledge from potential clients about Fintechs. Nevertheless, these obstacles motivated the founders to move forward and consolidate the company as a reliable alternative to the people in need of payroll loans.

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The team’s entrepreneurial spirit was critical to ensure the sustainability of the business. The long-term approach and the conviction of the leaders allowed them to recruit a highly prepared team with plenty of years of experience in loans management and sales of financial services.

The leading team that was conformed back then is still part of the company today, demonstrating that more than colleagues, they are a family that shares the same vision: to become the most innovative Fintech, reliable and inclusive, that makes the clients’ dreams come true and meets the stakeholders’ needs with quality, effectiveness, transparency, professionalism with excellent customer service, all while leveraging on the latest technology.

ExcelCredit’s first headquarters

The leading team’s vision has made it possible to overcome the obstacles that might be faced when a company is growing. This provides the foundation for the process of continuous improvement, growing investments in technology and the consolidation of the operations to reach more potential customers.

Thanks to this, the company has expanded its presence across the different regions of the country. Its commercial strategy allows them to attend clients in branches located in both the main cities and in near-by cities through business advisors, virtual advisors and the mobile branch, a truck that offers all the necessary facilities to attend clients in small towns. Currently, the company has 24 branches, and it is planned to have 30 by the end of 2021.

Current ExcelCredit´s headquarters

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The Company is growing and there is yet a long way to go and many challenges to overcome. However, the business results have showed that the efforts and the hard work have paid off and that becoming an important player in a competitive market is possible, even for a group of young entrepreneurs that are willing to contribute to the development of the country, creating opportunities to those who need them.

THE MOTIVATION

Since the beginning, the company´s purpose was to offer consumer loans using the payroll lending model while bearing always in mind that achieving a long-term relationship with the clients is paramount. This means offering fair and transparent conditions to improve their living standards.

The company decided to focus on attending clients with bad credit scores, thus giving a second opportunity to those who, for several reasons, have failed to make payments of their loans and need to improve their financial situation. This is how, to date, more than 45,000 Colombians have received their loans. Most of the clients are pensioners that have not been served by other financial institutions due to their other outstanding debts.

Due to the granted loans, the company alleviates the customers financial situation, giving them back tranquility and thus preventing them to seek the pay day lenders or “gota a gota” lenders. Therefore, the company promotes financial inclusion and gives a hand to a market segment of the population that faces problems trying to get loans in the formal financial ecosystem. Currently, ExcelCredit has more

than 300 business agreements with government institutions at both the national and regional levels, through which pensioners, teachers, police officers, and government employees can apply for a consumer loan with competitive interest rates. In addition, the customer receives a pre-approved on the loan request only after 48-hours, on average; that said, the goal is to do it in a matter of minutes.

These clients are the best allies of the company because through them and their good experience, the company is getting more and more customers.

In addition, the clients currently make part of the referral program, becoming ‘brand ambassadors’ and getting multiple benefits for it.

During the seven years in business, several client testimonials have showed that the customers see ExcelCredit like a helping hand, a trustworthy alternative to improve their financial situation and like a door that is open when others are closed. This is because the company serves not only people with a poor credit history but also people with no history at all. This is the result of the development of a credit methodology to attend customers without any previous credit record.

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Therefore, ExcelCredit offers payroll loans to these market segments that face problems in finding backing by the traditional banking system. The company is willing to understand and is prepared to accompany these clients in their reintegration process into the formal financial system, always in compliance with the regulation.

Most of the clients belong to both the lowmiddle-income and the low-income brackets of population and the average loan is US$ 3.000.

However, it is possible to find clients from all socioeconomic segments as they are as well served by ExcelCredit. According to the surveys made by the company, the most frequent uses of loans are home improvements, tuition payments for grandsons and other relatives, and the creation of small businesses that act as a second source of income.

In order to offer additional benefits to the clients, in 2008 the company implemented a financial education program aimed at generating digital content about personal finances. The videos are published in the company’s YouTube channel and are available free of charge to all the people interested in these matters. This information is complemented with a weekly blog that can be found on the website and the topics are related to loans applications, legal loan aspects, and basic concepts and terminology on finance, among others.

Also, in these communication channels it is common to find clients that shared their

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experience with ExcelCredit. Their stories inspired others that just like them, are looking for a second opportunity to be granted a loan.

This is how many other potential clients know about ExcelCredit and learn how they can use the company’s services and see positive changes in their quality of life. Through these testimonials it is possible to observe the company’s commitment to social responsibility.

In 2019, the company decided to offer personal accidents insurance specially designed to satisfy the most critical needs of the clients.

This insurance includes home health care services, toll-free hotline for medical orientation, handyman services and provides monetary aid in case of loss of ID documents.

ExcelCredit works every day to improve its products and services to the benefit of those people that have been rejected by other financial institutions given their poor credit record, who base their dreams and projects on the chance of a new loan. In this sense, ExcelCredit supports them to make their dreams come true and achieve their goals.

THE MAIN ASSET Contrary to common perception, for the leading team of this Fintech, the main asset is not the data, technology, or the loan portfolio. For ExcelCredit, the team members are the most valuable asset. Currently, more than 300 people

are part of this family and most of them are young, dedicated employees, specialized in their fields and that are led by people with wide experience in the financial system.

In ExcelCredit the management seeks to have a working environment full of opportunities and challenges where the teamwork is enduring. Therefore, the staff has access to ongoing training programs through in-house platforms that allow them to broaden and update their knowledge about risks, internal credit management, arrears control, leadership, among others, on a regular basis.

The purpose of these programs is to foster curiosity and highlight the importance of learning by sharing. In addition, the company aims at developing analytical skills that can be applied to the analysis and understanding of several company’s processes. Thus, each employee will be able to contribute to different subjects with a positive attitude, allowing to achieve the goal of making the company the best place to work and the best Fintech for those that need to apply for a consumer loan via the payroll loan model.

To have happy, satisfied employees, ExcelCredit offers flexible working hours, has implemented home office for some of the workers, and recently adopted a casual dress code to make them more comfortable at work. In addition, each employee has access to several benefits that motivate them and contribute to an adequate work-life balance.

The company is led by millennials which is a competitive edge as it allows them to better understand the interests and motivations of the new generations. This is an advantage to ensure a challenging work environment to bring in new talents and to enhance the staff´s sense of belonging and their commitment to the company’s mission: to have an efficient and transparent corporative culture aimed at offering convenient financial services, focused on customer satisfaction and on delivering the financial results.

It is a fact that having well trained employees with the necessary skills to perform their job is important. However, in ExcelCredit the most valuable characteristic of all the members of the team is to live the corporate values and share them. It is expected that they will act ethically and professionally, because only in this way can they guarantee an excellent customer service and be recognized by the clients as a reliable financial solution.

NEW TECHNOLOGY Innovation is always present in every step the company takes. Therefore, permanent investments in technology are made and the operation is continuously assessed in order to improve the customer’s experience and be more effective in delivering our services. Thanks to the support of the in-house digital laboratory and its skilled engineers, the company has managed to increase productivity while also meeting its goals.

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ExcelCredit has created it’s in house technology that enables it to promptly respond to market changes and easily adapt to the customers’ characteristics. This has allowed the Company to have sustained growth with excellent portfolio quality, arrears control and satisfactory results.

It is worth mentioning that the Company has developed its own underwriting capabilities that feeds the core system with different data sources, allowing to determine the customers’ payment capacity while considering the risk assessment of the clients’ judicial processes. Therefore, it is possible to serve clients that the competition is used to reject.

The Company’s credit policies are based on the objective of providing support to the potential customers to make it through to the loans’ approval process. This means that ExcelCredit digs deeper into the client’s financial conditions understanding to offer a taylor-made solution, which is in line with the Company´s slogan: “who really knows you, knows what you need”.

Given the process of continuous improvement that the Company has, the web page was renovated las year adding a new online banking portal for the clients where they are able to get information about the status of their loan application as well as place loans certifications requests, request a new loan enhancing the customer experience.

Besides, there is a new virtual assistant chatbot named Sara that solves most of the clients doubts. This service is complemented by a virtual Kiosk, which is located in the main branches and offers remote assistance to clients.

On the other hand, a robust cloud-based CRM solution was implemented to support the business results and improve the efficiency and effectiveness in customer service. This new tool strengthens the personalized relationship with clients and helps the firm to improve the telephone sales because the information from social media and the website can be processed easily.

To complement the services portfolio, the Online Credit App will be launched this year. With this new product, clients will be able to apply for a loan, and the approval and disbursement will be 100% online. This means that customers will save

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time and money because they will get a loan easily and comfortably from home.

This is how ExcelCredit will extend its services to remote areas where there are Colombians that need a second opportunity. It is worth noting that this new app will not generate additional costs to clients given that its purpose is to enable access to people in different regions of the country while supporting financial inclusion.

That being said, it is important to mention that the ExcelCredit’s management still struggles to get support from the government entities with which they have payroll loans agreements as they do not update their internal processes. This is an obstacle to allow more of their employees to benefit from the Company´s services.

In the next months, ExcelCredit will add insurances to its online services portfolio.

The main goal behind this project is to offer complementary services with very special conditions to the clients that they are currently attending.

ExcelCredit is a Fintech that is conscious that broadening credit access has a real impact in the quality of life to those Colombians that, for one reason or another, do not have enough savings or access to credit to satisfy their needs. Hence, the loans are one of the most efficient ways to redistribute resources among the population and give opportunities to the ones that need them.

The Company aims to become a leader in the non-banking financial sector and fulfill its value proposition of providing peace of mind to people by giving them access to an easy and timely financial solution. The leading team identified a need in the market, and they are doing their best to accomplish this goal.

Everything began just like an idea, and the hard and constant work, the tenacity and effort of a group of young entrepreneurs made possible that the Colombian financial system now counts on a Company that, with transparency and fair conditions, has created a sustainable business that promotes financial inclusion based on high quality standards.

The Online Credit App is an alternative to reach more Colombians in diferent regions of the country EXCELCREDIT |

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We encrypt Grupo empresarial

all kinds of logistics processes, transactions and digital documents

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BERIBLOCK: PRIVATE BLOCKCHAIN TO ENSURE AND GUARANTEE THE INTEGRITY OF DIGITAL DOCUMENTS

Financial institutions and “fintechs� (technologybased companies that offer financial services) in Latin America are exploring applications to use Blockchain technology to improve their operational processes and internal fraud risk.

Making an investment in this type of technology without being certain that it will be a success can be a risk that entities prefer not to take, either due to high development costs, lack of expertise, resources, or other reasons. The foregoing leads to these financial institutions losing all the benefits that Blockchain technology can provide today, specifically to guarantee the integrity of any electronic document, record any modification to them and certify who is their owner, all without depending on a third party such as custodians or securities deposits.

WHAT DOES BERIBLOCK OFFER? A private Blockchain made up of all the clients of the company, in which our clients can register any type of electronic document, such as electronic promissory notes, debt or capital securities, invoices, contracts, financial or merchandise certificates of deposit, diplomas and degree certificates, product integrity certificates, among many others.

The main benefit provided by using the Beriblock platform is to guarantee, through state-of-theart private Blockchain technology, the integrity, authenticity and non-repudiation of any registered electronic document, and at the same time preserve the traceability of any modification

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to them, which includes keeping the record and certifying who are the owners of said documents at any moment of time. All of the above with the highest digital security and at the lowest market price. Other complementary services we offer are electronic signature of documents, origination of documents such as promissory notes and contracts, custom development of digital credit solutions such as affiliation, digital identity and financial scoring, and custom developments for the implementation of Blockchain technology in traceability of physical products, as well as development of “Smart Contracts� fo _asset tokenization projects, among others.

SCOPE OF BERIBLOCK TECHNOLOGY Beriblock operates with Hyperledger Sawtooth technology, which is a modular platform that allows the creation of distributed databases that are maintained and implemented without the need of a centralizing entity of the information.

This network is maintained and controlled by the Linux Foundation, which hosts the most important open source projects in the world such as companies the size of Google, AT&T, IBM, Intel, Microsoft, among others. Hyperledger is recognized as the largest and most important private or enterprise Blockchain network that exists today. Specifically, the Sawtooth network has unique advantages in terms of scalability, operability, storage and transaction speed of the digital assets registered on it. One of the most important characteristics of the Sawtooth network is that it allows parallel transactions and can support transactions with and without prior permission1. Likewise, its modular architecture allows it to be adaptable to multiple varied solutions, meaning it is highly flexible in its usability. Hyperledger Sawtooth internal governance is managed by the Linux Foundation and is focused on creating very strict and secure consensus and smart contract rules. Similarly, this platform is designed for business solutions since it comes with BFT features2, supports Smart contracts written in Java language and its storage system is the merkle radix data structure, which is common in other Blockchains such as Ethereum.

1 Concept 2006033594-001 of August 29, 2006.

2 Concept 2018120539-008 of November 14,2018.

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All this allows: Transfer digital assets quickly and safely.

Maintain the traceability, inalterability, nonrepudiation and integrity of the transferred documents.

Guarantee the security of the information of the documents according to the strictest standards of our clients.

REGULATORY FRAMEWORK For the registration, transfer and execution of promissory notes with blockchain. With the advent and emergence of new technologies, which generate increasingly rapid changes in the way of doing business, today it is very common that given its nature, electronic promissory notes are issued in the process of creation, circulation and negotiation, the fintech sector is carried out exclusively by virtual means, without resorting to the services of a custodian or securities depository. It is increasingly common that companies that are part of the fintech sector, use this practice to develop their corporate purpose, even more so if it is taken into account that the reason for being of this sector is precisely to incorporate, in an agile and safe way, new technologies in the provision of financial services.

In this sense, it is feasible to use innovative technologies with Blockchain (especially private blockchains), which guarantee the integrity, nonrepudiation, traceability and confidentiality of records of electronic promissory notes, as well as the possibility of registering any change of status (cancellation, seizure blocking, modifications, annulment / cancellation, among others), register electronic signatures on unregistered or previously registered documents, and register transfers of ownership thereof, covering figures such as property endorsement, guarantee endorsement, proxy endorsement, and any other type of endorsement. Due to the nature of the technology, it is virtually impossible to delete the records and modify them, thus ensuring the integrity of these records through this technology is met.

The practice in question fully complies with the Colombian regulations applicable in this regard, in

particular, the regulation on securities provided by the Commercial Code and Law 527 of 1999 that defines and regulates the access and use of data messages, such as the following is specified: Article 619 of the Commercial Code defines the securities, within which the promissory note is counted, as “necessary documents to legitimize the exercise of the literal and autonomous right that is incorporated in them”, which will be fully Valid if they meet the requirements established in article 621 of the same estate, that is, that the right that is incorporated in them is mentioned and that it is signed by the creator of the title. For its part, Law 527 of 1999 recognizes the legal validity of data messages, that is, electronic documents, including electronic promissory notes. In this sense, the Financial Superintendency of Colombia stated that “a data message may be classified as a security, to the extent that in addition to the requirements provided by Law 527 of 1999 to be considered as a data message, it complies with the characteristics of the securities and with the general requirements provided for in article 621 of the Commercial Code”3.

Thus, for the creation and validity of an electronic promissory note, it is enough to comply with

the definitions and conditions of Law 527 of 1999 and the Commercial Code. In this regard, the intervention of a custodian or a securities depository is not necessary, as their services are only necessary in the stock market, given the magnitude of the operations carried out there.

It is important to note what was expressed by the Financial Superintendency in this regard: “in relation to the legal nature of electronic securities, it is important to mention that they are regulated under commercial law, particularly in the Commercial Code and in the case of electronic titles under Law 527 of 1999 (hereinafter “Law 527”) and its regulatory decrees. Second, as supported by the concepts mentioned in your question, there is the legal possibility of issuing electronic securities, which meet the legal requirements, which may be deposited in a Securities Depository, for the purposes of their dematerialization and annotation. Taking into account, among others. That said, we find that, in the issuance of electronic securities, the deposit and custody in a Securities Depository is optional and not mandatory4 .

3 Concept 2006033594-001 from August 29 of 2006.

4 Concept 2018120539-008 of November 14, 2018.

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One of the ways in which the incorporation of technologies in the provision of financial services is achieved is through the creation, subscription, circulation, negotiation and execution of electronic promissory notes, whose authenticity, originality and traceability are guaranteed by new technologies, in the terms of Law 527 of 1999, being fully valid for the celebration of any business, and even for its judicial execution, if necessary, as explained below: Negotiability: In accordance with the Commercial Code, the Securities must be negotiated in accordance with their circulation law, namely: i) registered ii) to order, and iii) bearer.

Said negotiation can be with or without responsibility. It is clear, then, that electronic promissory notes created and subscribed through new technologies can be negotiated under the terms of the Commercial Code, since nothing obliges individuals to resort to the services of a custodian and, much less, the law detracts from the validity of documents represented in data messages, as already mentioned. Regarding the vocation of circulation of electronic promissory notes, article 9 of Law 527 has provided for the possibility of negotiation through endorsement, a figure that in principle was instituted for the transfer of securities, as mentioned in the explanatory memorandum of said Law. Execution: For a promissory note, in general, to be recognized by a judicial authority, it must contain a clear, express and enforceable obligation in accordance with the requirements of article 422 of the General Process Code (CGP).

Additionally, in regards to electronic promissory notes, article 244 of the CGP, presumes the

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authenticity of those documents in the form of data messages. For its part, Law 527 of 1999, in its 10th article, establishes that data messages will be admissible as means of proof and their probative force is that granted in the provisions of the General Code of Process.

The foregoing supports the possibility of providing an electronic promissory note in order to make the payment of an obligation effective within a judicial process. Likewise, it is important to note that, as the doctrine has indicated, there is evidentiary and technical freedom to accredit the reliability of and security and reliability of a computer system outside of the Specific Accreditation Criteria, it enjoys technical freedom, provided that under the procedural rules are accompanied by a proficient expert in the matter and its reliability and safety is demonstrated. (Mendieta, 2020). Finally, it is important to note that there are already orders for the payment of promissory notes that have been executed without the need to use a Securities Deposit or a certificate of patrimonial rights, such as that of the Seventh Court of Small Causes and Multiple Competence of BogotĂĄ, filing 2018-0606 Legitimation and circulation: In the same way, the legitimation also fulfilled due to the fact that the person who has the data message is to exercise the right, allowing its communication or sending to whoever can exercise the right, fulfilling the requirement of the delivery of the title. This has been indicated by the Financial Superintendency of Colombia, through concept No. 2006033594-001 of August 29, 2006, where it stated that “regarding electronic securities it should be noted that the material delivery of the same is not common, so that will be transferred from the use of one or more data messages or electronic records “.

With regard to the law on the circulation of the electronic security, this must be complied with as provided for in the regulations on the circulation of physical securities. In this sense, as the doctrine has indicated, “the transfer of the electronic security or order, and in accordance with its circulation law, requires electronic endorsement and electronic delivery (remission and receipt of the data message or the Electronic record). The registered electronic security title requires electronic endorsement, electronic delivery and registration in the obligor’s book. The electronic bearer security will continue to circulate with the electronic delivery of the document to the new endorsee holder.

But unlike the traditional security, each new holder is identified through the same electronic transfer record ”. Consequently, in electronic securities the physical delivery is replaced by the electronic record that guarantees integrity and authenticity, which are the requirements established in article 10 of the UNCITRAL Model Law on Electronic Transferable Documents, an article of mandatory compliance in attention to article 3 of Law 527 of 1999. On the other hand, it is important to note that the Financial Superintendence of Colombia, in the Basic Legal Circular, Part 1 Title II Chapter 1 numeral 1.3, empowered the supervised entities to optimize operational processes and improve the provision of services to financial consumers, specifically, the aforementioned circular stipulated that “Surveillance entities can adopt technologies such as augmented reality, internet of things, blockchain, intelligence artificial, machine learning, big data, robots, among others, when they consider it pertinent to improve providing services to financial consumers and optimizing their processes.

For this purpose, the entity must carry out adequate management of the risks associated with the technology adopted, regularly verify the effectiveness of the controls implemented and comply with the current regulations on data protection and habeas data. “ Finally, it is noteworthy that the will of the parties in commercial relations must prevail, especially if there is no express rule that prohibits making the agreements that the parties determine, by virtue of the principle of legality for private parties and

In our team

Juan Fernando Chaparro - Legal Director

María Alejandra Estupiñán - Commercial Manager

María Camila Peña - Commercial Leader

Valentina Palacio - Marketing Analist

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the principle of freedom of enterprise enshrined in our Magna Carta. In this sense, if both the debtor and the creditor expressly agree that the signing and / or registration of endorsements and modifications of a promissory note will be carried out by means of a specific technology, such as blockchain technology, which adjusts to the regulatory parameters set forth above.

It must be ensured that the will of the parties prevails and is fulfilled as in any other private agreement.

ABOUT OUR CLIENTS Currently our clients, among which Homecenter and Compensar stand out, enjoy the advantages of Blockchain technology for the protection and registration of promissory notes, invoices and other valuable documents. Specifically, with Homecenter we provide the digital integrity service in the “Scan & Go” product, which allows buyers to pay digitally and not have to go through the checkouts in stores. On the other hand, Compensar originates its loan portfolio with our technology, and ensures the integrity of its promissory notes with blockchain technology, that is, without depending on an intermediary and acquiring a copy of these registers upon

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becoming a node on the network. We also work with other “Fintechs” such as Bancupo, Oncredit, Prestagente, Rapicash, and we are in a pilot with a Bank of great importance for the agricultural sector, as well as with many other companies in the financial and real sector that bet on innovation and see in Beriblock, a great ally to guarantee the integrity of your valuable documents such as electronic promissory notes, with the highest security in the market and at the lowest price.

ABOUT US

Beriblock was founded by the PrestaGente team, the first Fintech startup to use Blockchain for document authentication in Latin America (since 2017). This technology has been recognized by the Accenture Innovation Award, Digital Bank Award 2019, the BBVA Open Talent 2018 contest, Apps.co, Holt Fintech Accelerator in Canada and Rokk3r Labs in Miami, among others.

We offer various companies in Latin America, guarantees against the integrity of documents of all kinds, secure digital credit processes and electronic signature.

We offer to various Latin American companies, guarantees against integrity of documents of all kinds, digital credit processes, insurance and electronic signature.

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We are the first ‘fintech’ for SMEs in Latin America offering 100% digital financing (factoring, confirming and working capital credit).

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THE COMMITMENT TO FINANCIAL INCLUSION FOR SMEs: OMNILATAM AND ITS TRANSFORMATION INTO GREENSILL LATAM

In Colombia, as in Latin America, SMEs are the economy’s engine. According to the Organization for Economic Cooperation and Development (OECD), these generate up to 90% of the jobs in several countries in the region.

With this in mind, OmniLatam was born; the first company in Colombia that provides working capital financing to SMEs in an agile, transparent and 100% online way. This fintech (a provider of digital financial solutions and financial technology) helped these companies to pay their salaries on time, meet their tax obligations and finance their growth plans, freeing them from continuous dependence on cash flow.

In 2020, OmniLatam was acquired by Greensill, the leading provider of working capital solutions worldwide. This led OmniLatam to become Greensill Latam, to expand and provide financial solutions to more companies in Latin America.

Before telling all the details of this operation and Greensill Latam’s prospects in the region, it is important to know how this came reality and how the idea of providing financial solutions to companies that have everything to continue growing was built.

A PHILOSOPHY TO HELP COMPANIES OmniLatam grew out of the experiences that members of the founding team faced. They experienced firsthand the difficulties that most Latin American entrepreneurs experience when they are trying to obtain access to quality financial services.

Aware of the great challenge that entrepreneurs face to develop a business, the uncertainty of financial closure each month to meet payments

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Underlying asset

FACTORING

CONFIRMING

Not Confirmed invoices

Confirmed invoices

Origination to date.

US$30 million

KT

Invoice lien

US$150 million

US$20 million

* The numbers refer to the period between January 2018 and December 2019. The monthly source figures are converted to USD according to the average exchange rate for the period.

ORGANIZATION BY COUNTRY TOTAL: US$111 Million

TOTAL: US$124 Million

US$21 Million

US$31 Million

US$90 Million

US$93 Million

Origination 2018

Origination 2019

Total portfolio, 60% Colombia, 40% Chile US $ 30 million as of January 31 *Numbers converted to USD according to the constant exchange rate of 3,300 COP / USD and 700 CLP / USD.

FIRST-TRIMESTER ORIGINATION TOTAL: US$18 Million

TOTAL: US$26 Million

TOTAL: US$58 Million

US$2 Million

US$4 Million

US$29 Million

US$16 Million

US$22 Million

US$29 Million

* Numbers converted to USD according to the constant exchange rate of 3,300 COP / USD and 700 CLP / USD.

and provide for their families while they build their dreams. OmniLatam created previously non-existent solutions that at this moment are of crucial importance for the local and regional economy. They observed that the existing options did not satisfy entrepreneurs needs when seeking financing: obtaining access to factoring or confirming through banks and traditional entities is not very friendly experience; The processes require several documents and procedures and, even so, when they are approved, they contain unfavourable hidden costs for the entrepreneurs.

When wondering why the system is like this and why there is not a more viable way to support and finance SMEs, a great opportunity was found to create a better way to help them and solve

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those pains, which for years traditional banking had not resolved.

This is how OmniLatam was finally launched: a financial service capable of financing SMEs, through the purchase of their invoices, immediately, 100% online, completely transparent and without hidden charges.

Since 2017, OmniLatam has financed, with more than 250 million dollars, to about 5 thousand SMEs, which said they were satisfied with the support and quality of customer service offered by this fintech, that is based on solving that problem to which small and medium-sized companies in Colombia face every day.

OmniLatam’s have offices in Santiago de Chile, Bogotá and Medellín.

Transparency: Rates and fees always at your disposal Security: Your data has never been more secure Speed: Disbursement in less than 24 hours.

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Diego Caicedo CEO and Andrés Abumohor COO

OMNILATAM: A SOLUTION CREATED

BY ENTREPRENEURS FOR ENTREPRENEURS Diego Caicedo, OmniLatam’s co-founder, became an entrepreneur at 16 out of neediness.

He learned on his own to develop software to pay for his university studies and that is how he began helping SMEs throughout Colombia to create their websites.

Diego liked entrepreneurship so much that he later created a coffee export project and later started a company in the mining sector with which he had more than 200 workers.

However, during the financial crisis of 2008, no bank wanted to lend him money and did not find places or reasonable rates despite having invoices and contracts with the best companies in the country, something that ensured that he would have future flows to pay any loan. Due to this situation and the lack of liquidity, his company went bankrupt and many people lost their jobs. After this experience, Diego created Portal Finance seeking to offer a solution for the barriers of access to financing for SMEs. Meanwhile, Andrés Abumohor, OmniLatam’s co-founder, was working in a financial company in Chile that made loans to SMEs. During the time he worked there, he wondered why his own

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finance company and other banks were asking for so many documents and did not have the flexibility and transparency to help small and medium-sized businesses. Andrés tried to make changes in the company but had little success.

For this reason, he decided to undertake and try to change this situation through his financial institution: Motor Financiero.

Diego and Andrés met by coincidence when the two of them were seeking to solve the same problem, asking the same ambitious question: how to help finance Latin American SMEs by making use of new technologies to improve the customer experience and solve the underlying problem transparently and effectively.

Sharing the experience of owning SMEs and having worked in financial entities, Diego and Andrés decided to partner to create OmniLatam with one goal in mind: to be the ally that small and medium-sized companies need.

Later, Juliana Cadavid -who became OmniLatam’s General Manager in Colombia- met Diego and Andrés when she was trying to support entrepreneurs from all over the country together with her partners. In those days, she was managing one of the first Colombian fintech and pioneers in confirming in the city of Medellín. When Diego, Andrés and Juliana met, they felt a great affinity. Juliana quickly joined the OmniLatam team.

OMNILATAM BUSINESS MODEL OmniLatam’s main goal was based on helping, financing and supporting SMEs so that they can be competitive and grow. This was done through the advance of pending invoices and factoring and confirming services: that is, each client delivered their pending invoices receivable and during that same day they received the payment, with a discount from the total value of the invoice.

After this, the company took full charge of the final customers, allowing companies to forget about this problem.

Juliana Cadavid General Manager in Colombia

This is how the three of them joined forces with their companies and own experiences and successfully launched OmniLatam services in Colombia, where they started with a few clients, marking the beginning of their adventure and growth.

Soon OmniLatam’s successful performance drew the attention of venture capital funds from the United States and Latin America such as Magma Partners and Alpha4 Ventures, with whom they worked to finance its growth. This, in turn, caused other banks and asset managers throughout the region to support them.

All these investors supported the fundamental pillar on which this company was founded: to create a solution that, if it existed before, it would have saved Diego’s mining business and many other entrepreneurs in the country and Latin America. Thanks to its founders and investors, the company began to operate in Colombia and Chile supporting ventures, which in turn create thousands of jobs, strengthening the economy in their countries, creating wealth for all entrepreneurs and generating a positive social impact for the entire region.

OmniLatam began working with large companies in Colombia such as Corona, Renault, Comfama, Images, among others. These companies trusted us to manage their supply chain, helping them sustain their business in the short, medium and long term. By working with partners at this level, OmniLatam gained valuable insight into its supply chains, allowing it to offer more convenient rates to its customers. Even when an SME is not working with one of the associated companies, it could also use the factoring tool.

OmniLatam became a great option for large companies that were looking to simplify and improve their production chain, supporting their suppliers.

The process of a company that wants to be an OmniLatam customer began with the registration on our website. An executive immediately contacted the company, managing to deliver financing on the same day the request was made. The whole process was 100% online. With OmniLatam, everything was designed so that all the processes were done from a computer and so that the entrepreneur could focus on what matters most to him: managing his business and continuing to grow it.

After depositing the money to the customer’s account, OmniLatam started working with the debtor (the company to which the SME sold its product or service), to receive the payment with the original terms of the invoice.

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THE TEAM THAT MAKES THE DIFFERENCE In addition to Diego Caicedo and Andrés Abumohor, OmniLatam now has more than 150 collaborators in Chile, Mexico and Colombia, the majority being located in Bogotá and Medellín.

The team was divided into three areas: technology, support for SMEs and support for large companies. OmniLatam managed to attract international talent, transmitting its vision and consolidating a team that is committed and aware of the nature that characterized the company.

Our team comes from more than ten countries, with diverse experiences, but with something in common: the desire to create a great impact on small and medium-sized companies in our continent.

All OmniLatam collaborators had a stake in the company, thus aligning their incentives with those of OmniLatam, to achieve the fulfilment of defined and jointly agreed objectives. This allowed the employees not to feel like just another executive of a financial institution, but to commit to the interests of the company.

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TECHNOLOGY THAT HELPS BUSINESSES FINANCES OmniLatam was created to solve SME´s problems with technology. So, we started by building everything from scratch, without all the traditional systems and archaic processes.

OmniLatam had a team of more than 75 engineers in Bogota, exclusively dedicated to developing friendly and transparent solutions.

OmniLatam´s system was developed to allow SME´s to apply for loans up to $1million, 100% online and without having to wait for weeks for it to be approved.

As a result of technology, OmniLatam transformed their clients’ lives and at the same time encouraged other financial institutions to innovate using their technology as the basis of their businesses. As an active member of Colombia Fintech and Chile Fintech, OmniLatam was a key part of the growing ‘fintech’ ecosystem that is revolutionizing people lives and SME´s throughout the region.

OMNILATAM, AN ACCELERATING VEHICLE In addition to having a highly professional team, OmniLatam had the support of important actors from different countries on the continent such as Colombia, Chile, and the United States.

OmniLatam´s investors were venture capital funds such as Magma Partners (fund for the United States and Latin America), Alpha4 Ventures, (Latin American found) and important family offices throughout the region. Also, Colpatría, Itaú, Credicorp Capital Colombia and Coltefinanciera, among others that have been essentials for their growth.

Due to the good results, OmniLatam ‘fintech’ was also highlighted in the main national and international media such as El Tiempo, La República, TechCrunch, LatAm List and Forbs magazine, which recently included its founders in the list of Colombian promises.

On the other hand, Andrés and Diego continue to be recognized opinion leaders that write columns about the latest ‘fintech’ trends in the region. Furthermore, thanks to their hard work, OmniLatam was chosen LatAmList as one of the most important fintech companies with the potential to become the next “unicorn” in Latin America.

Diego is recognized as a young leader for his work in the financial industry. He has been invited to give speeches on different occasions around the world to tell his story with OmniLatam. He has presented his success story at the International Finance Corporation (IFC), Inter-American Development Bank (IDB), London Fintech Week and Lendit, among others.

“You guys are the ones that have helped me grow” Carlos Andres Zarco General Manager

“Thanks so much for trusting “Montacargas”, for us is very gratifying to be part of this project” Juan Camilo Betancur General Manager

MEXICO, THE NEW CHALLENGE After successfully testing the model in Colombia during 2018 and 2019, OmniLatam´s team decided to land in Mexico, opening a business office there. This projection helped to continue building OmniLatam´s strategy: to consolidate itself as a leader in Latin America and with it to support thousands of entrepreneurs and SMEs throughout the region.

The road has not been exempt from difficulties; however, the essential values and trust of OmniLatam positioned this ‘fintech’ as a key ally of SME´s, paving the way for a unique impact in the region and in those who sustain the economy of nations.

OmniLatam has transformed into Greensill Latam

What customers say about Omni

The accelerated growth of OmniLatam, made Greensill, the market-leading provider of working capital finance for businesses globally, interested in acquiring it. Greensill has financed more than 143bn to more than 8 million customers in more than 175 countries.

“Excellent Platform. Quick and 100% reliable. I have been working with them for a year and they always have responded”

The operation, which took place in June 2020 and was highlighted by world-known media such as Bloomberg and Forbes, will unlock the US $750 billion capital for more companies.

Rafael López Monje General Manager

The Greensill acquisition process transformed OmniLatam into Greensill Latam.

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Technology company focused on offering digital financial services for Latin America, starting in Colombia with credit at the Point of Sale.

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A CREDIT FOR PURCHASES THAT MATTER With a little over a year operating in the Colombian market, ADDI is positioning itself through its technology in a segment that is very familiar and used by Colombians: the financing of their purchases by requesting loans at the point of sale. Traditionally, merchants grant credits directly to their customers from their own stores, as does, for example, Jamar or Flamingo.

Now, ADDI is breaking into the payment method market, combining cutting-edge technology with a disruptive loan model that is already seen in countries like Australia, where the Afterpay company is generating billions of dollars in credits, or in the United States, where Affirm generates more than three billion dollars a year.

ADDI grants credits digitally from the point of sale and ensures the financing of purchases without the need to process physical papers and in a few minutes.

Santiago Suårez, founder and CEO of ADDI, comments that this Fintech is the result of having lived for more than 15 years outside of Colombia, working in finance and technology, in banks as important and recognized as JP Morgan and in LendingClub, the largest and most important Fintech in the world at that time. His experience allowed him to know first-hand and understand the dimension of the impact of technology on access to credit, financial inclusion and experience from the consumer’s angle.

Upon arriving in Colombia, and with the aim of contributing to the development and growth of the country, Santiago observed that in the national market only 15% of the population has access to a credit card. He also discovered that to obtain a loan you have to carry out a large number of procedures, get co-debtors, in addition to the high interest and intermediation

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rates, among other obstacles that appear during the process. With this outlook, he identified a great opportunity to help people achieve their dreams and goals through the approval of agile loans by creating a world-class technology company. Finally, together with Elmer Ortega, currently in charge of the financial core and transactional data for clients and Daniel Vallejo, who is in charge of accounting and portfolio, they founded ADDI. The process began with the planning and development of a technology company, whose medium-term product can be operated anywhere in the world. “We are going to focus first on Colombia and Latin America, where we

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see that the model we are implementing does not exist,” says Santiago.

“We want to reach the hearts of customers, making a reality the possibility of making those purchases that are important to them, those purchases that fulfill dreams. Examples of this are important purchases for the family such as a refrigerator, a mattress, an English course, children’s school supplies, Christmas gifts, house renovations, medical treatment; purchases that fulfill family goals and dreams. If we do it well, in an agile and very easy way, our clients will be happy and will return to us many times ”, says Santiago.

“We want to reach the hearts of customers, making a reality the possibility of making those purchases that fulfill dreams, those that are important to them’’

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ADDI has a price structure that is very favorable for customers: no handling fees, no paperwork or co-debtors. The process is very transparent with the client, with annual effective interest rates of 19.99% to 27.24%, and that allow saving between $ 50,000 and $ 100,000 in interest in a single year for a loan of one million pesos, thus contributing to the well-being, tranquility and financial health of its clients.

Obtaining a loan with ADDI is very easy. The client can do it from the ally store where the purchase is going to be made, any day of the week, simply with his cell phone and his ID card. In real time, ADDI’s intelligent software analyzes more than 200 variables and generates a credit approval in a matter of minutes. The credit can be between $ 100,000 pesos and $ 15,000,000. And most

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interestingly, they reward the customers who have a good credit history with better rates.

In one year of operation, ADDI has granted more than one hundred billion pesos in loans from the points of sale of its allies, among the main ones are: Wall Street Institute, Open English, Bikehouse, Corona, Cemex, Pepe Ganga, Thermos; all leading and highly recognized companies in their sector. Allies are fundamental to ADDI and together they work hand in hand to increase the volume of clients and sales. ADDI currently has more than 90 allies that translate into more than 1,400 points of sale. The allies have indicated that since their relationship with the Fintech, their sales and average ticket have increased by 20% and 25% respectively. On a weekly basis, merchants receive payments for all

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sales made with ADDI loans, thus eliminating any risk in their collection and portfolio processes.

Since this year, ADDI is also offering its credits in the virtual stores (e-commerce) of its allies, becoming the first Company in the country to do so. With just entering some data, the system generates the customer approval of their credit in a few minutes so that they can finalize their purchase. “We want to be present in all e-commerce in the country as a payment method and give people the option to finance the purchases that matter to them, without having to depend on traditional, inefficient and expensive means�, says the director of the online sales channel of ADDI.

In addition, ADDI has just launched a product called PayLink, a new way to access their credits that allows the customer to request one by simply clicking on a link that he receives on his cell phone and through which he can fill out the data at his own pace, without limit of time or data loss, to complete the purchase. PayLink activates in a single day and is perfect for speeding up the sales process for merchants that do not yet have online stores. The impressive thing about the technology and the business model that ADDI has developed is that it allows custody of the credit title without having to generate a promissory note. The process is fully digital and controlled in the chain of custody at all times.

Besides, the technology they have developed makes it possible to avoid fraud by applying the

In one year of operation, ADDI has awarded more than one hundred billion pesos in credits from the points of sale of its allies.

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A World Class technology company strictest security protocols before the approval of each loan.

ADDI has managed to fund its operation with the most important global players in this segment: The seed capital for US $ 4,000,000 was obtained through Village Global, an investment fund of which Jeff Bezos, Bill Gates and Mark Zuckerberg are part, which seeks companies with projection to revolutionize the technology sector, and through the Andreessen Horowitz fund, an American venture capital firm founded

by Marc Andreessen and Ben Horowitz, which invests in early-stage start-ups and fast-growing companies. The fund has invested in companies such as Facebook, Instagram, Rappi and Pinterest. In this way, ADDI became the first Latin American company to receive the support of the Village Global investment fund; In addition, it obtained the continued support of Andreessen Horowitz, who led its Series A financing round, which raised US $ 12,500,000. The Village Global, Sinai VC and Monashees funds also participated,

a Brazilian investment fund, expert in supporting companies that have exponential growth projection in LATAM. And in recent weeks, amid the Covid-19 pandemic, the company received capital of US $ 15 million in a round led by Quona Capital, which participates in leading Fintech companies in Brazil and Mexico; Foundation Capital, investors in Rappi, and S7 Ventures. This injection of capital has made ADDI one of the Colombian companies in the Fintech sector with the highest investment.

This is why we can say that there are no employees at ADDI. There are founders, partners, and colleagues. Each member of the organization owns shares in the company. Today there are around 120 collaborator-partners, who mostly work in the technological area, the heart of the organization. In 2020, ADDI will focus on consolidating itself in the Colombian market, where there is enormous potential. It is estimated that in our country credits can be originated for more than US $ 500 million per year. By the end of 2020, the expansiรณn plan will focus on entering the markets of Brazil.

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Tomado de Brandhaus

A technology Grupo empresarial

company that was born to develop innovative products and digitize processes

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DIGITAL INNOVATION, A REALITY WITH COLOMBIAN SEAL The growth trend of fintech companies at a global level is a reality, so much so Silicon Valley, Tel Aviv and other parts of Europe and Asia have marked part of a relevant path to follow to guarantee growth based on these trends.

In Latin America the reality is no different, since these initiatives are being promoted thanks to the needs of users. According to the report presented by Finavista in May 2020, Colombia remains in third place in Latin America of 200 fintech companies, after Brazil and Mexico. Within this growth, non-financial actors participate who begin to propose really interesting solutions for the end user, unlike traditional financial institutions that did not have the objective of working towards the expectations of the end user and the generation of solutions that include a good experience for the same.

These financial startups brought a new perspective to the sector, making them become a great complement to banking, and thus could generate value for the end user; showing them to the entities that digital transformation is a challenge that today must take on. Some of these companies have already started taking big steps thanks to the global vision of ADL Digital Lab, a technology company inspired by fintech efficiency that was born to develop innovative products and digitize processes.

ADL seeks a comprehensive transformation of the transactional ecosystem to position itself as a conducive scenario for co-creation with other companies, involving entrepreneurs, startups, fintech, government and universities. A great dream that began with an idea by Ana Margarita Albir: to create a digital laboratory where

Transforming was just the beginning, digitally empowering is the goal.

Tomado de Revista Caras

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Committed to Colombian wishes, to changetheir experience from start to finish solutions to empower the Colombian consumer would be developed, maximizing efforts by integrating different actors that would enhance financial capabilities and that began with 5 more people.

FINTECH HEART The multiple solutions that were being presented from the fintech category and the understanding that the Colombian had changed, prompted the creation of Grupo Aval’s first fintech: Aval Soluciones Digitales (ASD), which was born as a Specialized Company in Electronic Deposits and Payments ( SEDPE) and as an inclusive financial company that understands and responds to the needs and socioeconomic context that Colombians face.

ASD, together with ADL’s strategic guidance, high-level standards and the use of new

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technologies and methodologies, developed its first product dale!, A digital platform that is constantly evolving reducing the use of cash and that allows Colombians to have at hand a tool where they can manage their money with total control, security and confidence.

This platform is available for all Colombian people over 18 years of age, natural and legal, banked and unbanked, can open their deposit in a matter of minutes, load their account easily and spend, pay and receive money by just writing their cell phone number or email.

CONSOLIDATING A INTEGRAL VISION Ana Margarita identified the work fronts, methodologies and capacities that have allowed the success of Fintechs and built ADL, developing a vision that consolidates work fronts

So that digital is not just a word that separates generations.

Tomado de Brandhaus

from a strategic leadership focused on guiding and proposing digital routes that respond to the needs of the business client, executing digitalization, innovation and advanced analytics projects.

In this way, ADL focused its efforts on technologically transforming Grupo Aval’s financial institutions and rethinking the traditional banking models, forming a team of experts in digital capabilities such as: Strategy, Agility, UX / UI Design, Software Architecture and DevOps and Advanced Analytics. An integration that allowed the arrival of two projects: “Request

for Occiauto Vehicle Credit” from Banco de Occidente and “Request for Libranza” from Banco Popular, which sought to provide the client with a 100% digital experience of the process.

Thus, and with the accelerated growth of the company, the entrance to new projects was opened for which a new expert team in Digital Marketing was enabled, turning ADL into an entity that encourages users to use the products developed and that inspires more companies to be part of this epicenter of digital transformation, shaping a unique transversal laboratory in Latin America.

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They continue to see infinite possibilities to make better what already exists and invent what does not.

Tomado de Revista Caras

In 2019, the Advanced Analytics area implemented its Center of Excellence (COE) that was created with the aim of leading, structuring and monitoring analytics projects of the companies ADL works with, making the company opened an ecosystem that same year to start managing entities other than those of Grupo Aval, this being an important step for Colombia with the development of a comprehensive fintech ecosystem.Â

EVIDENCES OF FINTECH PRODUCTS Along the way, ADL has managed to consolidate a dynamic that makes it easier for entities to acquire knowledge and execute processes to succeed in the new financial environment, in this way it has been working on 46 projects that allow redesigning the customer experience from digitization, models of analytics and banking portals.

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These are some of the products that have been digitized and which, the scope that can be had with a fintech attitude is highlighted: Occiauto Vehicle Credit Application, from Banco de Occidente, was one of the first success stories in which new technologies were applied to financial services with the challenge of getting interested users In a Vehicle Credit, they would get a response in minutes to their request for online approval, instead of 3 days and without the need to present documents or carry out more procedures. This not only achieved agility in the application process, but there was also a reduction in time in the areas of operations involved in the process.

ADL also worked together with Banco Popular, digitizing Libranza product to offer an agile and efficient operation, approaching the ofer in a self-assisted way or with personalized guidance in branches, optimizing the Libranzas Credit

process and improving sensitive aspects that clients perceive with value generators for them.

The disbursement went from being granted in 8 days to being granted in less than 24 hours and it brought benefits such as the use of the solution on mobile device, easier authentication without physical documents.

and that allowed to detect the probability of impersonation in digital requests for Credit Cards of clients with a high probability of being victims of fraud.

Another case of success was Fidubogota, with which ADL managed to establish a secure contact between the entity and the users, with the creation of a collective investment fund, granting their access through Virtual Banking and making the users able to do this process in just 45 seconds from anywhere, paperless and just 3 clicks. With this, it was also possible to offer an investment alternative to Banco de Bogotá’s clients through a Collective Investment Fund of Fiduciaria Bogotá for the fulfillment of dreams and goals.

Another relevant case was the creation of a churn model for Credivillas and Porvenir, which, in order to strengthen retention and user experience, a product was created for AV Villas that improved the Free Investment Credit indicators and in this way, it was designed and developed an analytical tool and commercial strategy focused on optimizing retention and loyalty campaigns. In the case of Porvenir, those clients who are more likely to change their retirement funds pensions were identified and some of the retention strategies were implemented, such as discounts at the National Theater, informative pieces and the ADEN course, helping to improve the retention of customers.

ADL has also deployed several analytical models that capitalized on the customer’s understanding to offer a better experience, such as the creation of a Credit Card Fraud predictive model for Banco de Bogotá, a product that guarantees the detection of identity theft fraud without affecting the experience of the client in the flow of digital origination of the Banco de Bogotá Credit Card

ADL also worked in the banking portals, renewing Personal Banking for the 4 Grupo Aval banks and of which 3 were created from the beginning in ADL and deployed in just 4 months; thus covering 100% of the digital life cycle of users and generating more frequent enabled transactions such as inquiries, login, payments and transfers.

The synergy of knowledge is the basis of growth.

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A WINDOW TO THE FUTURE ADL Digital Lab Starts a new phase seeking to involve other actors outside of the Aval ecosystem, thus ensuring that fintech companies continue to be part of the different spaces for knowledge synergies and in this way, job opportunities can be enabled on the whole.

During these 2 years, several projects from different entities have arrived together with their collaborators to establish themselves in ADL, which has allowed the consolidation of a high-level knowledge space, where Colombian talent obtains comprehensive learning by participating in the creation of innovative solutions for digital platforms that complement banking and other verticals.

Thus, a culture was generated whose main axis is transversal knowledge, and an academic sense called ADL Academy, a space that capitalizes on the connection between different actors of the ADL ecosystem with external actors and that, at the same time, inspires from their capacities and talents, generating qualified innovation.

Within those moments of connection with actors outside the ADL ecosystem, ADL Hemisphere was enabled, a format designed in 2 phases, that of knowledge synergy and the identification of possible co-creations that during these 2 years have allowed startups, fintech, government and universities to participate in the laboratory to present how they have solved the needs of

consumers and what have been the implications that this has brought from the use of new technologies so that they will finally become success stories and know the challenges that they await you. These spaces have as spectators all the entities that have projects in ADL, which has allowed the identification of possible opportunities to enable synergies, since to date more than 24 companies among which are Fitpal, Alpina, U. PolitĂŠcnico Grancolombiano, Innpulsa, Merqueo, have already visited ADL and thanks to these learnings, the second phase of product development can be activated showing a possible scenario to work together with companies and identify a great potential for synergy to offer better services to Colombians.

AT THE SERVICE OF DIGITAL TRANSFORMATION ADL wants to continue promoting the digital transformation of companies, therefore, it has expanded its services for those entities that want to take advantage of the laboratory’s skills.

They only have to identify which of the following 9 service fronts can fit their needs and be able at the same time to capitalize on all the learning, experience, knowledge, commitment, technical capacity and innovation, which during this time ADL has consolidated to make Colombia a relevant player in Latin America.

They are sure that knowledge will lead them to do things that we believe are impossible.

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These are the 9 services it offers ADL Digital Lab: Digitization: as an end-to-end digital transformation of existing products that renew user experiences through an agile way of working that delivers and evolves products and services. It is a process that involves issues of strategy, agility, design, architecture and DevOps. Transformation of the technological stack: consists of the modernization of the technological stack to make it more efficient and scalable.

Disruptive innovation: focused on generating new business models, innovative products or services that are committed to building a robust digital ecosystem.

Analytics: with which a data strategy aligned to the business vision is developed, generating sustainable competitive advantages in the time.

Agility: focused on supporting the development of agile skills, abilities and knowledge. Design: support in the design and development stages of services and / or products focused on user experience aligned with business needs.

Cloud Services: acceleration of the use and adoption of the cloud, generating value for customers through the use of world-class frameworks in strategies and use of Cloud, DevOps and SRE components.

Digital Marketing: provides support in the construction of capacities and skills necessary to execute digital marketing strategies focused on performance.

Transversal Services: consists of the enabling of shared services, availability of common APIs and with business logic, as well as web / mobile capabilities that solve business functionalities and that are integrated into digital platforms.

THIS IS JUST THE BEGINNING It is now 2020 and ADL Digital Lab has managed in 2 years to transform the way of doing things and continues with the firm intention of taking Colombia to a stage with greater prominence, contributing to this fintech revolution where innovation is an essential part of its DNA and technology will always be a participant by accompanying to a large extent the management of its value chain.

ADL has positioned itself as a new technological partner that helps entities to be more agile by guiding digitization and to be more efficient in real time, thus simplifying processes for users, generating value for Colombians and bringing a new thinking model to the different companies that today put their trust in this laboratory where the organizational culture and product processes are constantly feeding back, strengthening capacities, promoting a better experience to the end user and making each project a case of success.

Undoubtedly, the fintech essence of ADL is impregnated with challenges that have been overcome that open the immense possibility of working together with entities that are outside the Grupo Aval ecosystem and in which the protagonists will always be products with a large dose of digital innovation that will continue to offer value to the consumer and made by that great talent of the Colombian label, the ADL Digital Lab label.

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Cloud Accounting and Administrative Software Security, Quality & Ease

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SIIGO:

A CONSTANT REINVENTION HISTORY TO TRANSFORM ACCOUNTANTS AND ENTREPRENEURS’ LIVES.

Transform accountants and entrepreneurs’ lives is the Siigo purpose, a purpose which is evidenced since its beginnings, its transformation to The Cloud and nowadays, as a technological ally with its entire digital ecosystem.

Siigo is a dream that began with five clients in 1988. Its founders Ricardo Ortiz and Fernando Rebellon were pioneers at selling technology in a world where computers were not even common.

At the very beginning, this enterprise was thought “simply” as a system to elaborate and print documents and although that nowadays it may seem something basic, it was the first step of an enterprise that now has an internationally recognized accounting and administrative software.

Even though to reach this point, the path has been long, Ricardo Ortiz was a visionary for his time and that experience served so that with the arrival of the color computer, he saw a unique opportunity for the business to evolve and in that way with his business partner they began to create a software capable of displaying information in an easy way, function that made entrepreneurs fall in love and remarked a growth milestone that let Siigo to receive its firs foreign capital investment for a technology enterprise through a Belgian multinational company.

By 2010, Ricardo Ortiz decides to buy back the 100% of the company to his business partners and in the same year, David Ortiz enters as Innovation Manager. With these changes,

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strategy also changed focusing on one single product selling, leaving behind the 12 products that he was trading together with the Belgian entrepreneurs; that single product would allow Siigo to mass transforming more SMEs in Colombia. That substantial change highlights the importance of returning to the heart of the business. That is how the Siigo culture starts to play a crucial role in organizational development.

All above and the decision of working in The Cloud, fosters a hyper-accelerated growth. For this reason, in 2012 important transformations took place within Siigo, one of them is that with the new refocusing it appeared the opportunity of applying to be a member of Endeavor, a world class accelerator whose main objective is for startups to grow at a pretty fast pace. At the time of being selected, Siigo receives exposure to a big host of mentors and other entrepreneurs’ experiences that allowed the company to start developing a much more ambitious and international vision.

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By the end of 2016 Siigo was already an organization totally on The Cloud. This marks an important transformation point, not only for the organization but also for its clients. Opposite to what was happening with traditional programs which had to be installed directly in the computers and reinstalled to get an upgrade; Siigo clients were already able to instantly perceive the improvements and access the information from anywhere with Internet access, which shows the strong commitment to accompany the SMEs transformation in the country.

With this transformation, one of the Siigo´s main inputs, its culture, keeps taking more prominence than ever. Within the organization, the values are lived in each area and they are not the common ones at any organization, they are challenging and perhaps simple at their perception but they break the normal paradigms and make Siigo a different enterprise; this is how the purpose of transforming the lives of the accountants and entrepreneurs is really and genuinely breathed,

and each collaborator has understood that takes a part of this purpose and might contribute to fulfill it from each assigned task.

Siigo as a technology company in the middle of a change of its business model from local software to Cloud based software needed a capital investment to continue growing. In 2017, Accel- KKR appears, one of the most important Silicon Valley technology investment funds, and becomes the ideal fund for Siigo. Beyond their investment return, Accel-KKR worries about the enterprise´s constant growth and Siigo´s culture was one of the main attributes that not only distinguished Siigo form others but also increase its probability of success in the market. This was how they decided to make their first investment in Latin America.

What is interesting in this investment, additionally to the capital injection, has been the incredible knowledge that this new partner has brought with it, remarking the beginning of new transformations in such organizational, business and market level. The obtained resources were used to accelerate the development of new technologies in such way that it was possible

to offer more innovations and solutions. This ease the operation of Siigo clients and with those technological possibilities, the big change for Siigo business model arrived, the purpose of transforming the lives of accountants and entrepreneurs becomes much more tangible by launching a totally fee free for accountants in the country product: Siigo Contador (Siigo Accountant) Siigo Contador (Siigo Accountant) was born as a tool for accountants around the whole country to have software access free. The idea with this is to achieve the purpose of transforming the accountants’ lives and that they can make the transition from paper or Excel accounting to a software that automates many processes.

Siigo Contador (Siigo Accountant) is completely parameterized and allows to include all the companies which the accountant works with, in that way Siigo achieve all the information to be entered from a single place, even more for enterprises that do not have the possibility to acquire software; this tool, managed by its accountant is ideal for analyzing financial information. Additionally, accountants have the

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possibility of associating their client enterprises to Siigo Nube (Siigo Cloud), which was designed as a perfect complement so that the entrepreneur, with Internet access, will be able to operate, administrate and have the complete control of his enterprise anywhere any time. Also, all that operational work that the accountant must do in a traditional model, like typing sales, purchases and expenses, is eliminated when the information and the company´s accounting are automatically synchronized, having as a result that the accountant´s operative work decreases up to a 60%. This gives the accountant the possibility to increase the number of clients he advises, to dedicate more time to more strategic tasks which improve the results of its client entrepreneurs and to transform its role into becoming a better financial advisor that makes the country´s economy grow.

By implementing this model of offering the main accountant tool for free, Siigo managed

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to increase its sales significantly, due to the same accountants are the ones to promote their enterprises to invest in Siigo Nube (Siigo Cloud), with the aim of optimizing processes and speeding up making decisions, crucial issue at the time of managing an enterprise.

In that way, with the creation of this product and while the Accel-KKR investment started showing its results, in 2018, David Ortiz assumes the presidency of the company and with him, it begins a new revolution: virtual operation. With the aim of transforming the entrepreneurs lives and helping them to be more efficient through digitation and help to increase the enterprises that survive beyond three years index, Siigo decided to overturn its sales and services model to virtual channels and in this way to impact as many entrepreneurs as possible in the shortest time. From the opportunity attraction, its conversion and further customer service for implementation and software use,

David OrtĂ­z, Presidente General de SIIGO

all the activities began to be carried out virtually and, in that way, a real time support is offered at each step of the entrepreneur technological transformation.

This virtuality is the one that allowed Siigo to be the enterprises transformation ally, due to the mandatory transit that they must begin for the electronic billing process; although this process has many benefits, including costs savings, processes optimization and cash flow improvement, it also means a huge effort for most enterprises that have traditionally carried out all their processes manually.

The idea that enterprises can implement this billing software process is that they take the first step towards the digital world and meet all other technological solutions within the Siigo Nube (Siigo Cloud) software. In this software entrepreneurs find an intuitive tool that allows them to manage their business from anywhere

and quickly, in addition to key indicators, allowing them to make the best decisions in such agile and timely way.

This software also dynamizes sales and inventory management processes and can in addition be integrated automatically with the accountant software. An important function Siigo Nube has is the opportunity of generating a payment button so that entrepreneurs are able to receive online payments, which results a very powerful tool in these times when market is becoming more digital each time. In summary, what Siigo makes is help micro, small, and medium entrepreneurs all around the country to run a more technological company to become more competitive, by giving them access to a tool that allows them to be at the same level of big enterprises at a cost that adapts to their needs.

Siigo also allows the accountants to improve their quality of live by avoiding moving around at the time of having updated information at

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a single place and promoting the accounting work transformation adding the possibility of an assertive and timely financial advice.

Although technology is present in our daily lives, many enterprises still cannot adequate their processes into the digital world; it is the reason because at the end of 2019, Siigo strengthened its digital ecosystem by launching its new app. It allows entrepreneurs to control the enterprise from a cellphone, in addition to generate electronic bills from the same one.

In addition, through an integration, its clients will be able to connect with different apps that allow them to carry out all their operations in an easy and agile way always from the same Siigo Nube software. Entrepreneurs then have the possibility of sending reminders to their slow payers’ clients, receive online payments, control their inventories, and even pay their payroll.

All of this with the aim of keep improving the competitiveness of MSMEs through technology, because what this ecosystem allows is that such small businesses have access to the last technological advances at a low cost.

However, the interest of Siigo for transforming those micro, small and medium entrepreneurs’ lives does not stop, and for that reason it has allied with Colombia Fintech in order to be able to give them the possibility to access credits

through Siigo Nube and help them to grow. In that sense the FINTECH element is a powerful tool to fulfill this purpose through a MARKETPLACE on the platform, where Siigo enterprises and accountants users will be able to access to online credits with differential market rates, as alternative sources to traditional finance system and as a mechanism to combat against informal loans.

In addition to the digital ecosystem launching, 2019 represented a year with a revenue growth of 71% largely thanks to the issue that its operation is more digital each time and in that way, nowadays, Siigo has more than 850 collaborators and impacts more than 140.000 enterprises and 52.000 accountants. Currently, the Siigo´s aim is to keep fulfilling its purpose in Colombia and to extend this dream and be able to transform entrepreneurs and accountants lives in Latin America, for this reason an internationalization process began, which includes organic and inorganic growth.

Finally, it is important to highlight that culture, purpose, and cutting-end technology use and development is what has allowed Siigo to keep in force for more than 30 years in the Colombian Market, becoming the administrative and accounting software leader for MSMEs in the country.

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The CCB is a private non-profit organization that seeks to build, in the long term, a sustainable Bogotรก - Region.

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THE BOGOTÁ CHAMBER OF COMMERCE. POSITIONING THE CITY

POSITIONING THE CITY AS THE MAIN INTERNATIONAL FINANCIAL CENTER AND AS A FINTECH HUB OF THE ANDEAN, CENTRAL AMERICA, AND THE CARIBBEAN REGION

“The number of Fintech companies in Colombia grew 26% in the last year and registers a total of 200 companies with a representation in Bogotá of 67% of the Fintech ecosystem at the national level” (Fintech Radar of Finnovista 04/30/2020).

THE CCB AND ITS PROMOTION TO THE BUSINESS SECTOR The Bogotá Chamber of Commerce, a private non-profit entity, founded in 1878, works forward building a long-term sustainable Bogotá - Region, by promoting increased prosperity of its inhabitants, based on business services and the improvement of the environment for business.

Its higher purpose is focused on serving collectively so that there are more and better entrepreneurs and companies, thus achieving a more prosperous and equitable society in Bogotá and the region.

The Chamber is at the core of building equity and well-being at the local, regional and national levels. The Entity is a source of political stability and the generation of employment and opportunities for the vulnerable population and the business sector, understanding that the fate of society is that of the private sector and that its future is a direct consequence of the work, resources and efforts that be guided in this purpose.

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The strategy and operation of the Bogotรก Chamber of Commerce generates benefits for entrepreneurs through programs and projects aimed at claiming the role of the businessman in society, promoting in them a change of attitude towards their role and their relationship with society and the environment. The strategy focuses its efforts on micro, small and mediumsized companies, which represent 99% of the business fabric of Bogotรก and Cundinamarca and is aimed at promoting the territorialization of services and activities throughout its jurisdiction, prioritizing resources to promote transformation technology of the companies, and design new and better mechanisms that allow increasing the income to the organization to sophisticate the solutions offered to its target audience. In the present, with greater impetus and relevance, given the scenario of the global pandemic (Covid-19) that threatens the health of human beings and negatively affects the economic development of different nations, the Chamber is in a reinvention process to support entrepreneurs at this juncture and accompany them in promoting their productivity, innovation and the use of new technologies, critical and necessary factors to give continuity to economic development and business sustainability.

In this context, the CCB leads efforts that are materialized in three main strategic lines of action, in addition to the natural function delegated by the State for more than 70 years, of administering and managing the public records associated with the formal operation of the Business.

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In the first instance, and with the purpose of generating greater added value to formal companies, the Chamber designs and permanently offers a robust and comprehensive portfolio of services aimed to promote entrepreneurship and business strengthening in the city and in the region, developing thus, the capabilities of entrepreneurs through an offer, mainly free, to increase their productivity in all stages and cycles of business development.

These services include a value offer that ranges from guidance to bring an idea or business plan to reality, to accompaniments with a greater degree of sophistication, associated with the management of innovation and the internationalization of business.

In the second instance, the Entity leads the civic and social dialogue on behalf of the business sector with different public and private enterprises at the local, regional and national levels to address cross-cutting problems that impede economic, social and environmental development. of the business environment in the city and region.

With a clear and forceful sectorial vision, in third instance, the Chamber exercises the Technical Secretariat of the Regional Competitiveness Commission of Bogotรก-Cundinamarca, under which the Competitiveness and Innovation Agenda is developed, also known as the Intelligent Specialization Strategy (EEI), whose objective is to sophisticate and diversify its productive apparatus, through a long-term, public-private collaborative effort that fosters

sustainable economic growth in the region with emphasis on five strategic areas aligned with its productive vocation.

This strategy materializes the sectorial vision of the organization, through the leadership of an agenda of 17 cluster initiatives in Bogotá and the Region, institutional arrangements that, in a collaborative way between public, private and academic actors, and with a sectoral emphasis, boost productivity and competitiveness of these 17 economic agglomerations in the territory.

This agenda manages and executes specific projects and actions to respond to the main bottlenecks that limit the competitiveness of these Clusters. In order to expand the information related to the Chamber and its Subsidiaries and in particular the response to the needs of companies during the Covid - 19 situation, they can enter www.ccb.org.co.

THE CCB AND ITS MISSION

TO POSITION THE CITY AS THE MAIN INTERNATIONAL FINANCIAL CENTER AND FINTECH HUB IN THE ANDEAN, CENTRAL AMERICA AND THE CARIBBEAN REGION. The determination of CCB to work boosting the productivity and competitiveness of entrepreneurs in the city, and the region, has led one of the most important cluster initiative agendas in Latin America for eight years. This agenda allows public and private players, and a total of close to 100 entities that exist today in Colombia. Multiple national and international recognitions and impacting results in the implementation of these clusters have positioned the city as one of the territories with the most solid and sophisticated institutional arrangements for the development of these agendas, in which public, private and academic players share a vision, to build work plans and execute projects and actions that stimulate the competitive development of the productive interests of the city and the region.

Within the portfolio of 17 cluster initiatives led by the CCB, since 2017 the Cluster of Financial Services of Bogotá and Region initiative has been promoted, a joint effort supported by an

institutional framework made up of about 220 public and private actors, academia and entities that support the local financial sector, that actively and permanently promote projects and actions to position Bogotá, in 2026, as the main International Financial Center of the Andean, Central America and the Caribbean Region. This bet is based on the fact that Bogotá is the financial center of Colombia and one of the most important in Latin America. In Bogotá, 57% of the country’s financial transactions are carried out and the Cluster in the city is represented, as of 2019, by more than 4,600 companies (46.7% micro, 28.7% small, 15.6% medium and 8 , 9% large), which contribute around 10.7% of the city’s GDP and generate more than 91,000 direct jobs.

The business environment of Bogotá allows highlighting different factors and attributes that undoubtedly contribute to the positioning of the city as one of the main financial centers of the Andean, Central America and the Caribbean Region.

BOGOTÁ BUSINESS ENVIRONMENT ECONOMIC MOTOR GDP of US $ 105 billion (32% of national GDP), has surpassed countries like Panama (US $ 65 billion) and Uruguay (US $ 60 billion). GDP per capita of US $ 9,247, US $ 2,600 above the Colombian average. Diversified economy. Services sector (60% of GDP), commerce (20%) and manufacturing (10%). Largest center of consumption, 11 million consumers, 22% of the country’s population. 51.6% (2016) of the population is middle class. Average growth of 3.6% in the last 10 years, above the LATAM average.

HUMAN TALENT With an economically active population of more than 4.6 million people, higher than that of competitors such as Mexico City (4.5) and Santiago (3.3).

120 higher education institutions that graduate 188,000 students per year, of which more than 44,000 have a postgraduate degree. It concentrates 43% of the Ph.Ds., 35% of the technicians / technologists in Colombia and is home to two of the best 10 universities in Latin America.

FOREIGN INVESTMENT US $ 22,000 million of foreign investment in new and expansion projects between 2008 and 2018. More than 1,500 companies with foreign capital are registered today in Bogotá. Bogotá is the 3rd city with the best investment attraction strategy in Latin America according to fDi Magazine.

Source: Invest in Bogotá, Foreign Investment Attraction Agency of Bogota (2019).

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Additionally, today Bogotá, due to the management of the Financial Services Cluster initiative, was positioned -according to the Findexable Global Fintech Index 2019 report- as the third Fintech Hub city in Latin America, behind Sao Paulo and Mexico City, the main exponents and leaders in the region.

This is based on the fact that more than 85% of the companies and players of the national financial sector are located in Bogotá.

The city concentrates the operation of 26 banks with a national presence, among which Citibank, Scotiabank, BBVA, Santander, Itaú, and BNP Paribas stand out, among other banks of international stature that compete in the local market. Additionally, the Colombian Stock Exchange and the Colombian Mercantile Exchange, the main players in the country’s capital market, have a presence in the city.

In terms of financial innovation and the fintech ecosystem - according to the Fintech Radar of Finnovista 2020 - the city is today the third Fintech Hub in Latin America, after Mexico (441 - 2020) and Brazil (377 - 2019). The above is understood to the extent that 67% of the country’s fintech companies are located in Bogotá, representing more than 134 companies.

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The fintech sector had an average growth rate of over 27% in the last two years, in 2019 with 29%, and in 2020, with 26%, a situation that demonstrates the real need for innovative financial products and services, and evidence the prospect of growth in the future. In terms of the fintech business segment, one in four companies is in the loan segment and one in five in the payments and remittances segment.

The fintech ecosystem is mature, 37% are in a growth and expansion phase, and 34% are ready to scale nationally and internationally. About 13% of fintech companies were launched in the last year. Currently, and with a contribution to job creation of more than 7,000 jobs, 84% of fintech companies are micro and small companies and have less than 50 employees, exposing a diversity in profiles, skills and competences.

16% of fintech companies have more than 50 employees, a condition that shows the window of opportunity for growth and expansion in the national and international market.

The level of internationalization of fintech companies is highlighted, to date 30% of these are operating in the markets of Chile, Peru and the United States. Colombia’s export dynamics in this industry surpasses Brazil and Mexico, leaders in the region. In relation to the dynamics

of foreign investment in 2020, 61% of fintech companies have been leveraged by international venture capital funds. In relation to this same dynamic, including local and national funds, in 2019, more than 40% of fintech with investment have leveraged figures above US $ 500,000, and 17% of these have achieved an investment attraction of more than US $ 3 millions.

These figures are expected to increase notably in the coming years, given the legal authorization (Decree 2443 of 2018) of investment in financial technology companies by financial institutions in Colombia.

The financial innovation ecosystem in Bogotá is dynamic and diverse. Traditional entities and, especially, the main business groups in the country respond to technological trends. Examples of this are the advances made by Davivienda of Grupo Bolivar with its innovation strategy “Domo i”; the strengthening of the innovation strategy of Grupo Bancolombia with the opening of its innovation and entrepreneurship center in the city of Bogotá; the promotion of Grupo Aval’s digital strategy, which concentrates the digitalization of the financial services of its four banks, among other innovation and digital transformation strategies led by national and international banks to address the increasingly sophisticated and existing needs of consumers financial.

The ecosystem in general, banking, fintech and the public sector, collaborates in line with the awareness of the impact and opportunity of appropriation of technologies from the fourth industrial revolution in the development and offer of their products and services.

The openness and strategic will of the institutions of control and regulation in Colombia to promote innovation schemes that deepen the access and use of financial services, as is the case of the supervision Sandbox, always under a scheme of consumer protection and solvency of the financial system.

Based on the above, and even more so at the face of the current crisis, this is one of the most important cluster initiatives due to its transversal nature to contribute to financial inclusion, access to financing alternatives, and the massification

of means of payment electronic and, in a timely manner, to local economic development, business formalization and poverty reduction.

The current work plan of the Cluster initiative includes projects and actions framed in the following strategic pillars: regulatory development, inclusion and financial education, human talent, innovation and positioning of the sector. Next, the main advances of the Cluster prior to the Coronavirus crisis were: Definition of public policy guidelines for inclusion and financial education in Bogotá. Diagnosis and action plan to close human talent gaps. Design and implementation of a City Marketing Strategy in which the attributes of Bogotá as a potential Financial Center were incorporated, and which today position the city as the third Fintech Hub in Latin America, after Sao Paulo and Mexico City.

Development, by the Chamber, of a portfolio of 10 specialized (free) business strengthening services to address industry trends: digital transformation, digital marketing, data analytics, financial regulation, among others. In a work between the Software and IT Clusters and Financial Services, actions are promoted to incorporate Artificial Intelligence in technological solutions for the financial sector. At the same time, specific projects and actions were prioritized and have been defined for the “Consumer Finance” segment, a joint business alternative for the Cluster for the actors to develop new business models supported in the exploitation of the data.

Efforts, in the first instance, will be aimed at developing and implementing “cashless microzones” in Bogotá.

Within the framework of these projects and actions, the role of the Chamber in its interest to promote the Cluster of Financial Services of Bogotá-Region, focuses precisely on articulating the leading actors of the local financial ecosystem to work on two fundamental and complementary purposes , particular and special scenario of the financial sector in view of its direct impact on the economic and social development of Bogotá and the country.

The Cluster initiative is today a neutral space to convene dissimilar and complementary actors,

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who, excluding their particular interests, identify challenges and challenges to guarantee the desired financial inclusion of the population and effective and equitable access to different sources, as well as alternatives, financing that inject into the economy the resources and liquidity necessary to give sustainability to the local and national productive apparatus.

However, the challenges of the new normal brought about by the pandemic, which will certainly not be short-term, challenge the status quo of the objectives and projects of the Cluster initiative and of the strategies and operations of traditional actors and new players. of the local financial ecosystem.

From a positive connotation of this crisis, the Cluster initiative’s agenda is strengthened in scope and impact, naturally supported by the role that the financial sector is called upon to assume and to face the challenges, not only in the face of the imperative need to guarantee sustainability and soundness of the financial system, but in the shared responsibility to mitigate and be a natural ally of clients, people and companies, to guarantee their financial stability and continuity of their businesses.

Covid-19 is a crisis that forces the different economic sectors to respond immediately, to transform their operational models, to reinvent their businesses and to change their holistic vision of the industry. The financial sector does not escape this reality and, in this sense, the international literature on financial matters proposes different alternatives to face the current state of emergency in the short term and in the medium term, the reactivation of business in a post-crisis scenario of coronavirus.

In particular, and analyzing the article “Role of Retail Banks in fighting Covid-19” by Oliver Wyman (April 2020), the strategies suggested to the financial sector to combat the pandemic are highlighted. In summary, Oliver Wyman’s article suggests that, during the health emergency, the next three months, and from then on, the financial sector should be a more leading ally for society in general, and states that it should not only focus efforts and resources on its customers, employees and shareholders.

Business continuity plans in the financial sector

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must focus, transversally and simultaneously, on the ability to satisfactorily serve customers (current and new), not only through the complete transition of its operations and channels to 100 % digital -to eliminate the use of cash-, but to respond and improve its services given the new critical demands of many of its clients.

An example of this type of actions and strategies is the ability to develop Covid 19 Response Centers, as a solution to address the specific needs of customers in the face of the situation.

In the second instance, it is essential that the purpose of the actors in the financial sector migrate to full responsibility, which in a postcrisis scenario allows society to highlight the imminent role of the sector in overcoming difficulties. In this context, banks in particular have the opportunity to “go the extra mile” and establish alliances with other sectors that allow them to respond to non-financial needs of your customers. The sector will play a more leading role in the response to financial difficulties, which, in the medium term, depending on the measures of the National Government and the discipline and responsibility of the Colombian population, could worsen drastically.

The degree of economic and social complexity of the pandemic will drive financial institutions to project and address new scenarios, develop and build more agile restructuring capacities and, without a doubt, exploit the use and exploitation of data to minimize barriers to accessing financial solutions. , and automate to the maximum the internal credit processes and other complementary areas. Given this international context, and recognizing the organized effort that the national and local financial sector has been adopting, it is important to share a summary of the measures that are currently being adopted by different players of the Financial Services Cluster and that focuses on the following factors : Linking the different credit solution entities to the preferential lines of Bancoldex (second floor banking) and other reliefs supported by the National Government with significant discounts in rates and favorable conditions for clients.

Adoption and extension of terms, grace periods and freezing of credits, to the extent possible, applied to interest and principal reduction or total elimination of costs and commissions of

“The CCB accompanies companies to boost their productivity, their innovation and make use of new technologies. With this, we achieve that the economic development of the region does not stop ”

bank and interbank transfers and increase the minimum amounts for these movements.

Reducing to the maximum the rates related to purchases in industries and sectors mainly affected by the crisis or validating the possibility of extending the benefit to all industries during it. Enabling dedicated and effective channels that allows companies and clients to renegotiate the conditions of the obligations according to the particularities of each case.

No impact on the credit risk rating of customers and companies affected by the crisis. Design and structuring of packages and customized, specialized and diversified credit products, according to the needs of different clients and companies.

Responsibility with suppliers: reduce payment times to a maximum of five days for all your suppliers. It is noteworthy that in the face of these measures, a representative number of financial entities are leading their adoption and implementation, as is the case of the Grupo Aval banks, Bancolombia, Davivienda, Scotiabank Colpatria and BBVA Colombia, banks that cut off to October 2019, according to the Financial Superintendency of Colombia, report an overdue portfolio at the national level with microenterprise clients worth $ 777 billion, equivalent to 64% of the entire overdue

portfolio in this segment. The above is added to a package of relevant measures that the National Government and some territorial entities, such as the case of Bogotá, have been leading and promoting to generate better conditions in the environment that guarantee greater liquidity and resources in the economy and facilitate, especially for micro and small businesses, access to financing alternatives that accompany and allow the continuity of their businesses. It is time for the local and national financial sector to step forward and demonstrate their maturity, their status as organizations with purpose and become vital players to overcome the crisis and cope with and accompany the economic reactivation of nations.

We invite you to think positively in the face of this situation and that the crisis prompts us to rethink ourselves so that from the Financial Services Cluster of Bogotá-Region, the country’s financial services and the different sectors of our national economy, we assume the term “Covid “, as a positive and hopeful message that “Colombia Vive Digital”.

“The CCB accompanies companies to boost their productivity, their innovation and make use of new technologies. With this, we achieve that the economic development of the region does not stop.”

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REFERENCIA is a fintech that specializes in providing Point of Sale loans, with highly convenient digital solutions for both merchants and end consumers.

Productos

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REFERENCIA FINANCING SPECIALISTS AT POINT OF SALE

BACKGROUND

REFINANCIA – the company where REFERENCIA was incubated – was founded in 2005. We knew right from the start that we had to be a “worldclass” institution, and understood that we could transcend and be comparable to sophisticated institutions that are respected and recognized for their impact in their industry. During this first phase we frequently included the word “dream” to capture the expected big goals that we established for our company.

The use of concepts like “world-class” and “dream” turned out to be useful because they helped us set aspirations that, at first, seemed impossible and even, some believed, irrational. But they ultimately reflected a business philosophy with high expectations and impactful results.

We were not looking to build something small and temporary, but a relevant and influential business.

Since the beginning of our business journey, we wanted to be seen as a “case study” associated with “high impact” entrepreneurs in our community, inspiring others to act and prove that doing things right can help go a long way.

In communicating this message, the relationship we built with Endeavor1 was critical, as Endeavor supported our positioning in this ecosystem and also created space for our teams to connect with global talent, which was a source of inspiration for the company’s evolution expectations.

We initially developed a business platform within REFINANCIA around purchasing and managing non-performing loan portfolios (NPLs). When 1 Endeavor is a non-profit network that supports high-impact entrepreneurs. Endeavor inspires, supports and connects entrepreneurs so that they can become regional and global impact business owners. REFINANCIA is an Endeavor company since 2008, while Kenneth Mendiwelson became an Endeavor board member in Colombia in 2013. REFERENCIA is an Endeavor company since 2019.

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buying NPLs, it was our intention to agree on solutions with clients that had defaulted on their payments. Individuals who had had issues with their loans were given a good quality service, and proposed a repayment agreement according to their needs, ensuring a personalized service.

commercial force that would be able to “connect” and offer payment alternatives tailored to each client’s needs. This platform required big teams that would negotiate financial solutions, as well as sophisticated analytics teams that would have to learn about our clients’ payment habits.

Purchasing NPL portfolios required the company to design funding structures to move large amounts of capital. World-class players, including local banks, international banks, private equity funds, and Colombian private wealth entities were invited to participate.

Over time, together with them, we achieved a robust and predictable models, which allowed for funding not only portfolio purchases from banks, but also new innovative businesses that we designed together.

REFERENCIA:

In order to provide specialized solutions to delinquent loan clients, it was essential to develop an operating platform that would manage large amounts of individual loans, and build a

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Loans at Point of Sale Very early in our business evolution, we understood that we had to find alternatives for the company to engage in loan origination processes for special niches, leveraging on the skills built during our initial phase – analytical sophistication to reliably predict loan payment behaviors; the understanding of clients’ needs in special niches; funding experience; and the culture of dignified client treatment. With these fundamentals, REFERENCIA was founded and, and as our offering gained traction, this origination business was spun-off, and our fintech with an innovative DNA was consolidated.

SPECIALIZED LENDING PRODUCTS In REFERENCIA, an orderly loan product design and launch process was structured.

Such products are integrated into Colombia’s local reality and executed with merchants and retailers as allies.

Li$to Pago-a-Plazos®

Aiming to have a relevant participation in the loan business, we thought that creating channels allowing access to niches with special needs was fundamental. Therefore, in 2012 an alliance was forged with Fenalco2 [National Trade Federation], aiming to leverage their strong merchant relationships, and their extensive knowledge and history of providing payment plan guarantees to their affiliated merchants.

Fenalco had been supporting merchants with products that helped them finance sales, such as Fenalcheque and other guarantees. Being based on this platform’s expertise and track record was important for what we built later.

In 2014, after completing testing, a flagship point of sale financing product known as Li$to – Pago-a-Plazos® was launched. This solution was designed to offer payment plans to buyers at points of sale. This product uses an online platform, and allows for loans to be immediately approved remotely or in-person, which makes it highly convenient for both sellers and buyers.

Li$to Pago-a-Plazos approves loans to individuals who may need to pay in instalments, but do not want to use their credit card. This product is mostly intended for clients with special needs, such as self-employed individuals3, who buy their supplies from specific stores, and clients who buy durable goods or services whose price is relevant enough to affect their household finance4.

3 Transport; construction professionals; clothing manufacturers, etc.

4 Mattresses, furniture, musical instruments, dental care, jewelry, etc.

We understood that working through merchants we could provide a number of innovative differentiated alternatives to provide credit to individuals. On the one hand, we could get access to a distribution channel with high-capillarity; and, on the other, we could design Point of Sale loan solutions according to products or services bought by end consumers. In addition, we clearly saw that the Colombian merchants needed alternatives to finance buyers, and they were open minded, with the intention to try new models, considering the digitalization and transformation process happening across the sector.

2 A Colombian association of businesses of all sizes, from all sectors.

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Li$to Educativo The partnership with Fenalco also resulted in a strong relationship with the higher education sector, where Fenalco (and now REFERENCIA) has been present for over 20 years and has been a pioneer. We understood that a large number of students needed loans to pay for their tuition, deferring it through the term in which the education services are provided – usually one semester. We adjusted our offering to enable features for colleges and students that wanted to pay for their education over time. With Li$to Educativo, students can apply for a loan to pay for their semester in a matter of minutes right from home or at the college, at very competitive rates.

Emerge / Working Capital Credit line After the economic crisis caused by the coronavirus, REFERENCIA, together with Fenalco, led an innovative idea aimed at supporting the reactivation of the merchant sector in Colombia: the Emerge Working Capital Credit line. This initiative consists of making funds available to self-employed individuals and legal

representatives of small businesses for working capital on fair terms, with guarantees given by the National Guarantee Fund. People can access this credit product very quickly, as applications can be submitted through our online platform.

Aiming to complete such a project in record time, REFERENCIA and Fenalco invited banks, government, and private sector to think big and join forces to work together on a common goal – supporting the small merchants to continue to move forward and bounce back from the crisis.

Fenalcheque Respect for the merchant’s habits has been a core principle in our story, and Fenalcheque is the best proof – a solution that is part of the way of doing business in the country since 1983. This alternative has allowed businesses to accept current dated and postdated checks without taking any credit risk. Although checks are not used as much, they still play a role in industries such as transportation, textile and communications. As commercial allies, we were committed to guaranteeing checks and worked to evolve our offer into a more convenient and more digital solution. Fenalcheque was and is a

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springboard for more retailers willing to sell by instalments to evolve toward a better and more convenient products such as Li$to – Pago-aPlazos®.

Other Tailored Products One of our first specialized financing products was a credit card for clients who had defaulted on their credit, but had complied with a payment agreement on their overdue debt with Refinancia. This credit card sought to be a continuation of the relationship built with the client after a refinancing option was completed, and it aimed to offer a solution to those who were not allowed access to credit because of a recent negative credit report. This offer relied on the relationship built with a client in distress, based on “decent treatment”.

By having close ties with banks, we understood that some wanted to enter niches with subprime risk characteristics but, if they did it, they needed to distribute part of the credit risk. We designed a product that helped a number of banks provide

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higher risk loans – clients exceeding the approval score – by providing a guarantee in parallel to the loan.

We also found that large retailers needed to provide direct loans to their clients, but needed a specialist to help them take the credit risk and manage the product. This supported their goal of strengthening their loyalty programs and entering into new customer niches. We started with a pilot that helped the largest retailer in the country provide a line of credit to clients that had no access to formal loans, but wanted to buy appliances and other durable goods.

So, we created a product to “buy now and pay later” at one of the most widely recognized and aspirational retailers in Colombia.

Then, we designed with a major home remodeling retailer, a type of loan that was launched for construction professionals, which allowed for working capital for anyone consistently shopping at the retailer’s shops and signed up for the retailer’s loyalty program. ***

REF CULTURE

Our business culture is a distinguishing pillar we feed and look after carefully. We use all kinds of tools to strengthen our culture; maybe our most representative habit is “energization”, as we call it, which consists of gathering all of our work teams from all cities together every Monday from 8 to 9 in the morning. Here we sing the company’s anthem, the best representatives are recognized, and the priorities for the week are informed; we allow for everyone to connect and participate. This space helped strengthen what we now call REF CULTURE – a way of interacting with each other and doing our work by following our 5 guiding principles: ethics, excellence, teamwork, energy, and efficiency. This business culture is one of the drivers motivating our employees to be part of a project that welcomes and makes them visible, where everyone is part of a higher purpose.

SEEMINGLY EASY FROM THE OUTSIDE Each of our milestones is ambitious, extraordinary and complex, but with discipline we move towards meeting each milestone.

From the outside, you can see a growth path; but from the inside, we have gone through a difficult, extreme and exciting process. We have been on the brink several times, but our higher purpose of writing a differentiated and inspiring story has motivated us to overcome any difficulty in the short term, with premises that protect our reputation in the long term. We are highly committed to our reputational capital and our business health. Ethics, as one of our guiding values, has set us on a path that is ours; we have taken huge risks, but have done it in a highly responsible manner.

FINTECH OF ORIGIN

From the beginning, at REFERENCIA, we have found it important to define our business vision and our history without losing sight of our origin and who we are. We respect our idiosyncrasy and we have adapted to the Colombian dynamics. We might say that REFERENCIA is a “fintech of origin”.

This concept has led us to draw inspiration and learn lessons from local models, looking for objectives that can both set our course and contribute to the country. Being a “fintech of origin” means understanding that regardless of all of the technology and analytics we may implement to have more sophisticated processes and products, a strong genuine personal relationship with our stakeholders always comes first. In addition to our alliances with all kinds of entities, we have always aimed to create value for banks, associations, private companies and businesses from many sectors.

We understand the Colombian financial sector, and we work with banks to have access to a funding structures that support the products we are exploring. We have not only intended to achieve synergies to innovate, but we have also engaged in the orderly development of financial sector and entrepreneurship related institutions; we play a proactive role in entities such as Endeavor Colombia, Colombia Fintech and Colcob, not only as members, but also as Board Members.

BIG DREAMS

We have great aspirations because we believe that societies are reflected by our dreams; we believe that business influences the country’s progress, and we seek to be an example.

Therefore, in REFERENCIA, we think big and are continuously looking to innovate. We are committed to continuing on the path to go “beyond the obvious”, and to find opportunities that will benefit financial consumers across the country.

Today, our payment plans are provided through thousands of POSs, and hundreds of thousands of consumers, who need to pay for their purchases in instalments use our products every year... We will continue protecting and combining the interests of our allies – investors, banks and merchants that have supported us in this ongoing evolution process.

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Gives you more

Gives you more

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We are driving thousands of businesses and our community to a better future www.Puntored.co www.Puntopay.co

PUNTORED “GIVES YOU MORE” Puntopay is the new technological solution for payment methods from Puntored, Fintech’s Colombian branch, which helps boost the growth of small businesses and independent professionals by providing financial services through innovative applications.

Founded in 2004, Puntored is one of the pioneering Fintech companies in Colombia.

Our innovative shared value model is based on providing benefits to thousands of partner businesses, mainly shopkeepers (one of the mainstays of the daily economy, for the lowincome population in emerging economies) and micro-businesses that promote our services in every corner of Colombia. That is why our purpose is to support and facilitate the lives of millions of people at the base of the pyramid to access financial services. In addition to that, we generate additional income to thousands of shopkeepers throughout the national territory.

During our history we have been consolidating ourselves by stages and in each of them successfully developing and launching new

OUR CONTRIBUTIONS USERS

7

Million JOBS GENERATED

350

POINTS AWARDED AMONG THE LOWEST-INCOME CLASSES

90%

Representing 86,04 of the population.

TRANSACTIONS

900K

Virtual Wallets

SALES.

750

Million USD

COVERAGE.

92%

of the National Territory

TRANSACTIONS

POINTS OF SALE

172

73.000

Million Puntored Products

products aimed at small traders who need to grow their businesses. At Puntored we have four lines of business:

LINES OF BUSINESS • Collection of more than 12,000 public and private agreements • Nationwide incentive and payroll payments • Deposits and withdrawals from major banks and wallets • International money order payments • Shipping and payment of domestic money orders • Collection and payment of direct agreements

• Money collection with dataphone • Payment link • QR Payments • PuntoCupo: Microcredits • Payment to suppliers • Recharge and purchase of mobile packages online • Online payment of public and private services

• Top-ups to all mobile operators

• Business Intelligence and Analytics

• Major mobile operator data packages

• It represents more than 70,000 stores in 7 major cities

• Sports recharges

• Real-time decision making

• Dematerialized SOAT

• Provides Help to shopkeepers to manage their business

• Marketplace for the shopkeeper to expand his offer

• My POS box with barcode reader.

• Tool to create new digital channels

• Alliance with Servinformation*

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Day by day we challenge the existing rules to create a network that excludes no one and connects everyone. To achieve this, we work hand in hand with those who are always willing to help the community; those who know each family and know what they need; who are always close and welcome anyone with a smile; who provide a reliable service that fills everyone with security.

These are our allies; they are the vital part of our business; we not only connect them with the whole country, we also connect them with those they love and with the opportunity to help others.

We are a network that transforms businesses, that evolves and simplifies life through technology.

A network that puts a bank in every corner, thanks to our correspondent banks, and that makes their lives and those of their clients more practical and simpler. A network full of easily accessible products, with simple, reliable and profitable transactions. And all performed from one place; because when we connect businesses and people, we create a better quality of life for everyone; we give people more time to do what they love, and we provide our partners with tools to grow as they have always imagined.

Our purpose is to support hundreds of thousands of small business owners and independent

professionals who are struggling to be competitive in an increasingly challenging environment. We are innovating and generating new businesses on a daily basis so that businesses can offer new alternatives that will generate income and a greater number of people in their business in the long term.

We are committed to helping them in their formalization and connecting them to the opportunities that the digital world offers.

Based on the latest technology, in a robust, replicable, dynamic and efficient structure, we have our own agile and stable platform which performs more than 172 million transactions annually in more than 900 municipalities in Colombia. It is supported in a strong IT security system, tested and monitored by our partners in the financial sector, with certifications of secure IT operation from EY and KPMG; in addition to a solid operational and credit risk control scheme that includes the management and control of SARO, PCN, SARLAFT, IRF policy, and an Independent Risk Committee composed mainly of external advisors, partners and risk and audit directors that ensures the application of the best practices of the financial sector to our Organization.

MONTHLY FIGURES SOAT’s sold

Million of sales

Million correspondent transactions

Prepaid phone providers

sports betting transactions

available collection agreements

correspondent service providers

deposit and withdrawal transactions in 6 wallets

Billion COP

Volume traded

Sales through e-commerce

integrated banks POS making reloads and package sales

National coverage

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nationwide coverage

OUR HISTORY

CONEXRED S.A.S. Is born.

• Integration of operators and cell phone recharges.

• First transaction in the history of Puntored.

• Integration with Redeban making Mobile Recharge the first non-financial service to travel through a payment network

• Launch of new administrative platform (CXR) and start of the process for the sales of recharges through POS.

• The new Puntored service portal goes into production, with more than one million dollars in transactions per day and new technologies for top-up sales.

• 20,000 shopkeepers were reached

• More than 10 billion transactions per month and 26 products offered through our network.

• Launch of the new Puntored image

• We launch our first Banking Correspondent service in alliance with Davivienda • Selected as Endeavor Entrepreneurs

• A partnership with DAVIPLATA is born and we become the first Fintech company to make transactions with an Electronic Purse in Colombia

• Conexred Caribe is born: First operation outside Colombia: Puerto Rico (700 stores)

• Incorporation of national money orders, payment of remittances, and prepaid television services.

• Nº 1. Leaders in government subsidy payments with more than 800,000 transactions per month worth 150 billion pesos.

• First Fintech company to offer subsidy payment services

• Winners of the I3 Latam Award as one of the 10 most important enterprises of social impact by New Ventures, Ashoka and the Swiss Cooepration Fund.

• Development of the MyCash POS application, where Servinformación and Puntored are combined.

• EY Award to the best emerging entrepreneurs in Colombia

• We reached 1 billion processed transactions in Puntored’s history

• Launch of Puntored Store, integrated with the main e-commerce sites • Integration of Bancolombia in the second semester, achieving more than 40 thousand transactions.

• We become retailer aggregators for non-cash payment methods.

• Integration with CB Bank Scotiabank Colpatria • Launch of Cashin and CashOut by Nequi • We launched SERVIPUNTO (Alliance with Servinformación) the most complete service of Information provision with information about Neighborhood Stores and Minimarkets in Colombia.

• Launch of Puntopay • With the integration of the banks of the Aval group, we offer the services of 9 banking entities in our points • Puntored strengthens its electronic payment network with a $20 billion investment • Integration with Compensar: the first Family Compensation Fund in the country.

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OUR LINES OF BUSINESS BET ON THE GROWTH OF THOUSANDS OF COLOMBIAN RETAILERS It is a tool for small and medium businesses, based on a platform that allows them to increase their sales and income with the marketing of products such as cell phone recharges, digital SOAT sales, prepaid TV, content, sports betting, among others.

national territory who provide banking services of the most important financial institutions in the country (Davivienda, Daviplata, Colpatria, Bancolombia, Nequi, Agrario, Giros y Finanzas, Popular, Banco Bogotå, Av Villas, Banco Occidente). We think about our clients’ time and our line of services allows users to carry out different types of transactions without going to a financial institution. At Puntored they can make payments for public and private services, deposits to accounts and withdrawals from the most important wallets in the country, thus achieving the bancarization of thousands of users who did not use technological tools before.

In the year 2020, two new services are included in the Puntomarket Platform: a seller-center that allows shopkeepers to supply their businesses in complementary categories such as fashion, sports, home, accessories, among others. For several years now, Puntored has been the leader in this category, being the largest aggregator and marketer of virtual products in Colombia with a volume of nearly 700MM USD per year.

Since 2011, Puntored has made available the proceeds of government subsidy payments from the Elder Colombia, Youth in Action, VAT Refund, Solidary Income, Solidary Bogota at Home, Families in Action, and Victim Unit programs to the network of correspondent points. This has made Puntored a simplified payment option for many financial institutions and the best alternative to reach the beneficiaries.

Another service, which was born at the time called Mercatiendas, is a digital platform that connects shopkeepers with consumers, allowing them to get their supplies without leaving home. Mercatiendas creates a virtual store for each shopkeeper where their customers can place their order and receive them at the door of their homes. It also makes it easier for storekeepers to accept Puntopay payments.

We work together with large mass consumption companies to strengthen the traditional sales channels or Store to Store. An example of this is the Alliance with Bavaria, in the TlendaCerca. co program, which allows to bring buyers and sellers closer together and to place online orders by bringing technology to thousands of Bavaria shopkeepers. Additionally, Mercatiendas was selected to participate in the government program #YoMeQuedoEnMiNegocio (#IRemainAtMyStore) as a support tool in the crisis derived from the Coronavirus in 2020.

This line of business turns the shopkeepers into specialized collection centers and ATMs of the community, and the corner store is now a recognized point of reference that provides innovative, different and alternative services for the sale of its products.

Puntomarket

Puntobank Puntobank offers transactions from all major banks in one place. Puntored offers a specialized network of more than 4.000 banking correspondents covering 82% of the

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Puntopay A new technological solution that enters the market with a varied portfolio of financial services aimed at individuals and businesses. It facilitates

transactions and receipt of any means other than cash, easily, quickly, safely, at any time and anywhere.

Puntopay is a mobile application born in 2020, which seeks to make people’s lives easier and contribute to the growth of our businesses and partners, digitizing their business and betting on the new changes that drive the economy today.

With Puntopay we seek to reach shopkeepers, small retailers, hairdressers, miscellaneous stores, stationers, drugstores, Internet cafes, entrepreneurs, mass consumption companies and people interested in digital payments.

There are different payment solutions within Puntopay: Payment Link: a tool that facilitates the process of receiving and sending payments for products and services, with all cards and PSE, easily, quickly and securely, without the need for web pages, long subscriptions, or complicated implementations. The purpose of this solution is to provide alternatives to retailers to increase their sales and facilitate the process of collecting payment for their products or services.

Our Payment Link is aimed at retailers, independent professionals and anyone who wants to make payments by credit or debit card.

a clear, transparent, easy and fast value proposition. A retailer can acquire the Puntopay dataphone for a single value, there is no minimum transaction or monthly fee, the device can be used at any time and in any place thanks to its small size and easy functionality.

Once purchased, the retailer activates the service to receive payments in the Puntopay mobile application by following the steps. The activation of the service is done immediately; once this process is completed, the dataphone is linked to the mobile device via bluetooth, and you are ready to start managing the business’ payments, view all transactions and have a detailed report of sales.

It will be possible to send the receipts of the transactions made by each client electronically; thus, eliminating the expenses in stationery and minimizing the environmental impact.

To use the Puntopay Link, the retailer or person interested in receiving payments must download the Puntopay App in Google Play, register and activate the Link Payment service by following the steps. Once the service is activated you can share the Link through WhatsApp or copying and pasting it to share it as you wish. In the case of the client who receives the link sent by the seller, complete the details of the form, select the payment method (credit or debit card), proceed to make payment to the retailer and that’s it!

Both the retailer and the customer receive a transaction confirmation notification.

With this product, Puntopay seeks to reach retailers and independent professionals who do not yet receive card payments because of concerns about high costs, and the belief that implementation difficulties and lengthy processes are involved.

Mpos or Puntopay Dataphone: acceptance of credit and debit cards through Puntopay dataphone operated through the application.

This service, like the others, is accessed through the Puntopay mobile application and its activation is immediate. The retailer can share his code digitally or display it at his point of sale to receive payments easily and quickly.

Puntopay fits the businesses needs offering

QR Payments: continuing with the implementation of a wide portfolio of payment methods, Puntopay makes the access to payments through QR code on location and remotely.

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PuntoCupo and Vendor Payment: With Puntopay we not only seek to offer the small retailer the ability to receive and make electronic payments, we have also generated the possibility for them to access a microcredit charged to their Puntopay account to increase their working capital, pay their vendors and make transactions within the application.

This product not only benefits the retailer, but also adds value to the supplier and/or mass consumption companies.

The product provides an innovation that facilitates payment to suppliers through the application: Reduces the capacity of fraud or theft to the distributor or supplier by not handling cash when payments are made electronically.

Minimizes the number of visits of the carrier to the store to verify if it has the cash payment; which implies a reduction of costs and travel times.

It has the possibility of increasing the stores dropsize.

It has a clear account model, which generates efficiency in the revision of who made the payment and when, avoiding the handling of physical invoices and money counting, this helping to gain time in the operation.

Value Added Services in the Payment App: At Puntopay we have developed an environment

for retailers or anyone to sell or top up and buy prepaid packages from different mobile companies and TV suppliers. Retailers are able to offer their community the payment of utilities, make money orders, etc. All these services help to generate income to shopkeepers and retailers.

Puntored is betting on this new solution to continue providing its network of allies new technologies and contributing to the growth of their businesses.

SERVIPUNTO Servipunto was born in 2016 from an alliance between Puntored and Servinformaciรณn (Colombian company with more than 19 years in the market, expert in consulting, information gathering, development and implementation of Geographic Information Systems). The alliance provides a service to support large companies in business decision making. Our clients include manufacturers and distributors, banks and telecommunication companies, who through information processing and data mining, can align and structure their efforts to meet the demand and needs in the traditional channel, offering effectiveness in decision making and strategy implementation.

Servipunto has a specialized team of experts in analysis, data scientists, statisticians, among others, who transform more than 3.5 million pieces of data obtained monthly into sophisticated analysis and control panels.

MyCash: Average Daily Sales Per Store

Daily Comparison - Current Month vs. Immediate Past Month, 2020. $$ Average sale perpor store Venta Promedio tienda

Transaction Date (Month/Multiple values) City: Multiple Values

Zone: All

Channel: All

Objective: To analyze the comparison of average sales per store over the defined periods

March marzo2020 2020

April abril 2020 2020

Status: Multiple Values

Average per por store % Venta sales Promedio tienda

% Daily Variation - Monthly

Objective: Relative variation of average daily sales per store

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April 2020

Important: Sales are updated daily. At the beginning of each month the comparison will be established as it corresponds to the evaluated period. Act. 03-2020, V1 April 2020

Average ticket per Shop – Month vs. Month

April 2020

Average Ticket Ticket Promedio

March 2020

Objective: Compare average over defined Objetivo: Comparar los ticketdisbursement promedio detickets desembolsos sobreperiods los periodos definidos.

Share % accumulated sales by time slot – Month vs. Month March marzo2020 2020 April 2020 abril

%% ofdel total sales total venta

Franjatime Horaria Sales slotde venta

Objective: Establish sales execution analysis by time slots

Month by month we deliver subsidies to the elderly, to the victims of violence and to the homes with children in school for their health and education; and during the country’s situation with Covid-19, Puntored’s network of correspondents, through the alliances with Banco Davivienda, Nequi and Banco Agrario managed to make more than 150,000 payments of government programs in 47% of the country’s municipalities (VAT refund, Solidary Income, Solidary Bogota at Home, and Vital Bonus).

M

EN

T

Puntored evolves and supports stores to digitize and have a new method of customer service through the technology platform MARKETSTORE that connects businesses with thousands of users. We have the support of large companies that share our dream of supporting shopkeepers, such as Davivienda, Credibanco, Nutresa and Bavaria (among others) to digitally transform thousands of retailers.

M

A ET

S TO R E

Puntored today is consolidated as the Fintech company with the greatest variety of digital products for its network of affiliated stores. It currently has 73,200 points of service throughout the country. During its 15 years of operation, its portfolio has diversified not only in cell phone recharges but also in strengthening its financial services and products, each one of them focused on the different needs of the population.

Every day we work so that our solutions contribute to the improvement of the community and generate a positive change in society.

RK

Among the benefits of SERVIPUNTO for the shopkeeper, it is worth mentioning: Integral Management of the Store (Sales, Inventory, Orders, Customer Administration, Portfolio).

“Business Intelligence”. “EASY” business knowledge.

Access to special offers.

Advanced integration with suppliers and distributors.

Permanent training.

Social Puntored

S U B S I DY PA Y

Servipunto was created out of the need to provide more timely and accurate information on mass market trends in the traditional channel to product manufacturers. The benefits for these large companies include: Changes in the behavior of the final consumer.

Timely information for decision making.

Change in the relationship with the consumer.

Evaluate market share and evolution of the competition.

Convergence of cutting-edge technology in non-proprietary languages with value-added tools.

Real-time information on market behavior

As a reference of information during the current situation, SERVIPUNTO, an Alliance with the company Endeavor Servinformación, supports the manufacturing and distribution brands, through information processing and data mining, so that they can align and structure their efforts to meet the demand and needs in the traditional channel, offering effectiveness in decision making and strategy implementation.

In this way Puntored continues its amazing growth track and positionings its various products. It will continue to help and facilitate the work of thousands of small shopkeepers in the country.

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TOWERTECH

sistematización de transacciones

UNA FINTECH ENFOCADA EN PAGOS

sistematización de transacciones

TOWERTECH UNA FINTECH ENFOCADA EN PAGOS

TOWERTECH UNA FINTECH ENFOCADA EN PAGOS

TOWERTECH

Una de las compañías más innovadoras

UNA FINTECH ENFOCADA EN PAGOS

TOWERTECH UNA FINTECH ENFOCADA EN PAGOS

TOWERTECH UNA FINTECH ENFOCADA EN PAGOS

One of the most innovating companies in Latin America in transaction systematization and integration of payment solutions

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TOWERTECH, A FINTECH FOCUSED ON PAYMENTS. STORY OF A VENTURE

When people ask me, what do we do of how we label ourselves, I would first say that in TowerTech Americas –before anything else- we are technology enablers and disruptors. TowerTech is a fintech that develops solutions for the integration and interconnectivity of payments in different segments (financial entities, transactional service networks, neobanks, retailers, couriers, deliveries, service stations, transport and fintech, among others), that simplify the way how these companies, users and payment methods or disruptive players in this industry relate and work with each other.

The best way to innovate or improve products and services is to involve clients themselves in the construction of these elements: this is why our corporate strategy is aligned with generating

digital transformation co-creating with our clients, seeking to articulate solutions from the implementation of transactional ecosystems through payment technology. Thus, we have found the way of generating giant leaps in the performance and capabilities of companies, allowing the business to think and do things it could not do before and accomplishing results in a more economic and intelligent manner.

Nowadays, it is clear that we are a fintech. It sounds odd to say that it is clear to us now, but this term was coined in Latin America and especially in Colombia, many years after than in Europe -where the movement was a trend long before in this part of the world-. While this was happening, many times we saw a door closed in front of us: it was not that easy for people to

Ximena Gonzalez - Lukkap Colombia, Juan Esteban Saldarriaga Ex President of the Directors Board Colombia FinTech, Mónica Ramírez Cofounder of TowerTech Americas.

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Mónica Ramírez in the Silicon Valley Immersion Program organized

by SV Links. Participants from Argentina, Colombia, Mexico and Peru.

believe in a different way of making things. They did not considered adequate for us to participate in certain businesses and we had to deal with the discomfort that our presence sometimes generated in traditional entities.

We are no longer the odd one out, even though sometimes we as Fintechs have to deal with market actors that are jealous. Even though our company is little over 15 years old, we truly have considered ourselves as FinTech some 7 years ago. The road to get to where we are now has not been easy nor quick. It is filled with stories and wonderful people that have crossed our path and also with very difficult times we have faced with extraordinary resilience. This allows me to state that certain entrepreneurs are like seeds: when someone try to bury us, we blossom and grow.

After working with many multinational companies that lead the field of electronic payments; going from those that were in charge of producing smart cards to those that created POS or point of sale terminals or as they are known in Colombia, datafonos; I was sure that there was something to be done to change things in the segment of present sale payments and that also allowed financial entities, transactional service networks, retailers, couriers and service stations among

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others, to have solutions fit for addressing their needs that even in a single segment or category could be very different, due to the operations done in each area. The market was treating them all as equals, and the chances to differentiate between each other was slim. This had to change, and new technologies has to be applied to the financial activity.

I studied in the University of los Andes, but contrary to what a lot of people think I didn’t have the support of my family because since I was 22, I was the breadwinner of all my family. I started just with an idea but with an important technical background, a large number of contacts and an enormous capacity of service and dedication to my clients. I remember that I didn’t have enough bus fare money and sometimes I was booked to meet a client; with whom today we have great business relations and many new projects in development; on Calle 72 and Carrera 7. My house at the time was located beyond Avenida 19 and Calle 134: for those of you that aren’t familiar with distances in Bogotá, that’s over 80 blocks in between.

I would ask for the appointment to be at 9 a.m. (never before because I wouldn’t make it on time), get dressed and wear tennis shoes to get to my appointment on foot: my heels were

Mónica Ramírez, Santiago de Chile

inside my bag. Sometimes I had to take POS samples, which added considerable weight to my journey. I think my clients will laugh when reading this, as they probably never knew how much it cost us to work with them. This will even be a surprise for some present and former collaborators of ours. When I made it to the corner, after three hours of walking, I took off my tennis shoes and put on my heels, longing for the cappuccino they always gave me because I hadn’t eaten anything all morning.

And when the meeting ended, I had to walk three hours to go back home where I worked in the all-too presently popular home office.

If anyone wonders about a meeting being cancelled without letting me know before, only when I had made all that journey, the answer is yes.

My sister Carolina sold her old Renault 21 and bought 20% of the company. She was my first

Startup is not a fad.

Entrepreneurship requires that you have a special talent to withstand a great level of uncertainty and stress. investor and truth be told, she has been an unmatched companion of work and dedication, my best friend and my right hand. Our first client was an international one: Solidario Bank in Ecuador. We developed the project known as “La Chauchera”, an electronic wallet based on smart cards and POS. I was able to travel to Ecuador to develop the sales procedures and take the engineers that made all the development and

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implementation process thanks to all the miles I had accumulated in the previous job I had working for a multinational company. I didn’t spend them, because it was my way of having a backup plan (even in kind) to begin with, because I didn’t have money to pay salaries and flights at the same time. I also needed laptops for the engineers during the trip, so I lent mine to one of them and another one was lent to me by Jorge Atallah, a great friend from university times.

I remember one December where we had a small budget for Christmas cards and some bottles of wine for our customers, but not enough for the shipping costs. My sister and I went out every Sunday from 6 a.m. around Bogotá on our bikes to deliver the cards and the gifts ourselves – never on a weekday, because my clients could notice. A lot of friends helped me to deliver these bottles in other cities (which were fewer) and delivering these presents themselves. Caro and I had great legs that time: I laugh thinking that we surely had an enviable physical state, but this was never comparable to our desire of making our dreams come true.

Once, when we went to Miami for a training session with one of my engineers (nowadays my dear friend, Ricardo Morales, now living in Holland), we had a very limited budget: we went around many hotels negotiating the rate trying to find a decent place that was adjusted to our needs and meagre capital. It was so low we contemplated sleeping in the car. We finally got the hotel.

When I look back and see that these are just some stories I lived through, and they really are a lot, I realized that these types of situations are very typical in ventures which is also paradoxical, because those who see it from the outside never imagine these things really happening.

I could tell even more anecdotes about what we as entrepreneurs face when we truly believe in the possibility of creating a country with our endeavors and of building a better world for our employees, clients and users. Being an entrepreneur is not for everyone. There are a lot of family sacrifices to be made: funnily enough, the biggest lesson I have is that the most important company is and always will be

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your family, and around it we must live and develop our ventures, and not the other way around. Sometimes, you will have collaborators that will not work with real commitment or that will criticize you and turn their backs on you, trying to make profits wrongly thinking that entrepreneurs always make lots of money and that they generate wealth at the expense of their work and sacrifice. There are others who truly value your efforts and some that even realize that fair and honest entrepreneurs like us will share benefits but not risks with our collaborators, and those people truly are ready to work hard. Sometimes, health will also remind us when all the burdens we bear don’t give us space to treat the body with the consideration it deserves, feeding it as it should be fed or giving it the hours of rest, it needs.

Starting a venture is not a fashion. Being an entrepreneur requires you to have a special talent to withstand a great deal of uncertainty and stress. We all know what happens when we truly make it -the so-called friends, success and happy faces all around-, but when we don’t, we will be labelled as losers. Some will think we deserve to lose, and others, like in soccer matches, will dare to comment how we should have played in order to win: they will know how, even if they’ve never even tried to play. At times like those, the network you have built for your moral support will be crucial. Then you will understand that being an entrepreneur is a path of personal growth. At first, you might think that success will come with money or recognition, but time teaches you -especially in difficult moments- to find a better version of yourself. And those people that ask you if you need help, or a loan or a helping hand to start all over will be your drive to get up and start all over. My drive has been some of my closest friends, the most loyal of my collaborators or even some of the largest and best-known companies in the country, who have decided to trust human talent and lent us a hand. I think we have responded in kind, a fair trade: to give everything back and respond to that trust given to us. My drive and my boost, Álvaro Motta and Alejandra, my daughter.

My recommendation for those who want to become entrepreneurs because they can’t stand the pressure of their jobs and think that

Edwin Zacipa, Ex - Executive Director of Colombia FinTech, presentation of the 8 most outstanding women in the FinTech industry in Colombia year 2.019

with their own business they will have less pressure, or because they believe that being an employee “robs” them of their time to do other stuff, because they imagine that having their own company averts the risk of being fired (I can give you a hint: that’s Disney, compared to the risks all entrepreneurs and company owners face every day), because they dream of becoming millionaires after a few years or because they want to ride the trendy wave that implies making a venture is a fashion, then better not to do it at all. There will be more pressure, less time, more risks, more responsibilities and more commitments; sometimes not even enough for your own salary and it definitely isn’t a trend or a fad.

A study made by Confecamaras shows that around 70% of all new ventures fails before the first five years. In spite of this; and that things today are not easier; there are at least more tools for whom are in this field for years, for those who are just starting and for those ready to dive in. From incubators and accelerators (public, private or corporate), equity or debt funds at all

stages, innovation and entrepreneur centers in universities, government support and promotion organisms, networks of angels investors, corporate innovation centers; consulting brands specialized in innovation, entrepreneurship and intrapreneuship; specialized media/blogs/ podcasts, active communities and meetups, crowdfunding and marketplace platforms – all tools to facilitate the road and give a hand to any company today. To companies and entrepreneurs I recommend knowing how does the ecosystem work, at least in its most basic form, because then they are able to understand the essence of how businesses can be created without using money from the pocket of the entrepreneur, find courses for the development of required human talent and to generate the necessary synergies and networking to build, develop and monetize any initiative that has real value. It is important to receive support in order to make an idea something tangible.

To date, we have not looked for help from any of the previously mentioned entities, but without a doubt, accessing several of them in this escalation

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of doing things is far from a true cloud native perspective we have started to adopt.

In order to become cloud natives, we work on being fault tolerant, to be able to extend the platform horizontally and write all the code so that it can profit from what the cloud provider offers, including test automation and an architecture based on serverless, Kubernetes, containers, functions and microservices, that allows us to be very agile in order to give our customers solutions tailored to their needs with high security standards. And I don’t mean just a security certification which we already have, such as PCI DSS but also security itself as a policy that is before anything. Today, we have the adequate tools to make constant developments and product updates, which today is known as continuous integration/continuous delivery.

Mónica Ramírez Cofounder and Chief Entrepreneur

by TowerTech America

We understood that, if necessary, we have to give a 180 degree turn to the company and to the resources it works with to become a company which is quick enough to learn and change constantly. Thus, we cannot imagine our operations now without the DevOps, the agile philosophy and an API-based interaction. Of course, we have to still use old protocols used by traditional actors in the industry, but this is

phase we are in now will save us a great deal of friction in a large part of the path we are crossing.

The changes we have gone through the last few years have been great and the acceleration we have experienced because of this is even larger still: from radical changes in personnel structure and organizational culture to making important investments in order to change business processes, reconstruct the architecture of the payment platform we had already developed in a monolithic form and move everything to the cloud building a new platform based on loosely coupled pipelines.

One must remember that for some companies to move everything to the cloud means just to move all the infrastructure and not worry about hardware maintenance. What this really means is that they truly haven’t changed anything than just working in the cloud and therefore, this way

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LatinPyme Magazine Cover, Issue No.176, March 2.020

precisely one of our strengths. We connect that world where there are services that do not respond to events nor activated with a “clicker” -how I call it- but rather must be executed permanently, where transactions are synchronic and not asynchronic, with the way of operating in the cloud destined to obtain agility, resilience and flexibility.

The difference and value of companies today lies in the speed of customer service, service integration, the interaction with all the digital ecosystem and in giving products and services that satisfy customers, detecting and understanding their demands. In order to know if our product truly satisfies their needs, we must collect data about them and truly understand how they use them. The methodology that is used nowadays for software products consists in implementing a minimum viable product (MVP) and update it based on a measurement of real performance.

Instead of allowing a design reaching the final level of production, DevOps creates the MVP as fast as possible so it can be quickly tested and redesigned. An MVP that cannot catch feedback completely loses its purpose. Gathering and interpreting data helps to improve the process, which is the main objective of the DevOps. Recognizing the importance of learning from the client of how does the product work, as well as the process, and how we can improve: this is the core element of our company.

Our main challenge is to become absolute allies to co-create digital transformation, related with payment methods and transactional needs that impact our clients, both in the physical sales point as well as the in the virtual one and/or their issued payment products. We work for this with our solutions, among which we have the transactional switch and our backend, which is able to integrate itself with most clients or third party services in order to implement a custommade platform, as well as our payment points mPOS with integrated dongles for card reading (with chip or contactless) and input of PIN, SPoC (Software PIN on COTS), CPoc (Contactless Payments on COTS), QR Code, OTP, token use, Blockchain and Biometrics, in different as a service modalities.

We are thankful of having the opportunity to work during these years in Colombia with wonderful clients such as Exxon Mobil, ACH, Bancolombia, Citi Bank, Grupo Exito, Banco de Bogotá, Puntos Colombia, Davivienda, Metro of Medellín, Credibanco, GANA, Redeban Multicolor, Banco Caja Social, Coordinadora Mercantil and Puntored. Internationally, we have worked with companies such as Verifone (United States), Stratus (Banesco, Panama), Xazar (Mexico) and Banco Solidario (Ecuador), among many others.

Thanks to them, and to the need of changing over time to become a better company in order to quickly respond to the current requirements of such a demanding market, is why we are the company we are today.

“This is for the fools”. That’s how Steve Jobs started an ad (created by the TWBA/Chiat/Day agency) for Apple in 1997 after he came back to the company, he had himself created and from which he was fired. The slogan “Think Different” was a stepping stone for a whole generation of people attracted by what was different, by the irrational, by a phrase that called to have a different mindset. This is why I want to close with Jobs’ words, that fit so well in the fintech world: This is for the fools, for the misfits, the rebels, the instigators, those who don’t fit, those who see things differently, for those who don’t like rules and don’t respect the status quo.

You can quote them, you can agree with them, you can glorify or insult them, but the only sure thing you can’t do is ignore them.

Because they are the ones who change things, who move the human race forward.

While some see them as crazy people, we see their genius.

Because the people who are crazy enough to think they can change the world, are those who actually do it. monica.ramirez@towertechamericas.co

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Acknowledgments I want to thank everyone who has made this publication possible, starting with my wife, my daughter and my father who have been behind tirelessly supporting this initiative. To the entire design team at the head of Beatriz Osuna for her great work and dedication. To all Promograf’s human team under the leadership of Germán Izquierdo for their great collaboration and professionalism.

I thank the Bogotá Chamber of Commerce for their valuable support, to Portafolio, to the Colombia Fintech Association who did not take more than 10 seconds to endorse and put on the shirt in this project, to Erick Rincón, the members of the board and all its members, who took time to listen to me, teach me many things, share their experiences, their knowledge, their adventures, their dreams. To all the people who are part of these companies for their tireless work developing this ecosystem, which makes today Colombia a world reference, being in the first global positions and be a role model.

I thank with all my heart, the time, dedication and their valuable contributions: Andrés Albán, Ignacio Gaitán, Felipe Lega, Carolina Vélez, Pablo Gracia, Kenneth Mendiwelson and Laura Tovar, who contributed some wonderful and very illustrative articles, which enrich this work.

To all the companies that shared their history, work, effort, tenacity, energy, sagacity, so that we can learn and know more of this wonderful ecosystem that is Fintech: Finsocial, Resuelve tu Deuda, Bankamoda, Rapicredit, Daviplata, Credíssimo, Transunión, Beriblock, Excelcredit, Olimpia IT, Omnilatam, Addi, ADL, Siigo, Towertech Americas, Referencia and Puntored, you are making a country and have made this book possible.

I thank you all for the infinite patience you have had with me. Thank you very much.

Javier Raventós

AFFILIATE ECOSYSTEM 31

FINANCIAL ENTITIES

Ach Colombia Acciones Y Valores Assenda Aval Soluciones Digitales Bbva Colombia Bancamía Banco Serfinanza Banco De Bogotá Banco De Occidente Banco Pichincha Bancoldex

9

Fluid Attacks Heinsohn Novatec Solutions

Evertec Fga Fondo De Garantias Findorse Ingenico

DIGITAL IDENTITY

2

Olimpia Intexus

4

Red 5G Sophos Solutions Todo1

OTHER CORPORATE

Asopagos Credintegral Credivalores Datalytics

2

Grupo Sura Juriscoop Mastercard Redeban Scotiabank Colpatria Seguros Mundial Seguros Sura Skandia Tuya

SOFTWARE PROVIDERS

Asesoftware Clouxter Digital Consulting Group

12

Bancolombia Bolsa Mercantil De Colombia Bolsa De Valores De Colombia Citibank Credibanco Credifamilia Fiduoccidente Fondo Nacional De Garantías Giros Y Finanzas Grupo Coomeva Grupo Factoring De Occidente

Kandeo Santander Consumer Veritran Visa

CENTRAL RISK

Datacredito Experian Transunion

CONSULTING FIRMS

Accenture Ey Colombia

Nimmok Pwc

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MIEMBROS COLOMBIA FINTECH 34

ALTERNATIVE FINANCING

Moni Ubuntec Agrapp Bancupo Oncredit Gulungo Cofinancer Linxe Referencia SAS siscredito sesocio.com Solventa

32

Excelcredit Kuenta Rapicredit One2Credit Krecicity Sempli Lineru Mutuo financiera Vaki Aflore

DIGITAL PAYMENTS

Flexibility Bold Recaudia Superpagos Fisgloba FlyPass Cajero Epayco Global 66 Kupi Movii1

10

Juancho te presta Alpha Credit Invest Latam Wadana Finnova ABL Capital Bankamoda Credissimo QNT Finsocial PrestaGente Finaktiva

Puntored Ecollect Dlocal Secure Pay PandaID Imix Tecnipagos Pagomas DRUO Powwi Lyra

Daviplata Armatuvaca Kushki Mercado pago TowerTech Transifiriendo Tpaga PayU Novopayment PayValida

PERSONAL FINANCE

Ikenga Resuelve tu deuda Trii Abaco

Tranqui Enbanca Financialo mejor Tributi

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Notecuelgues Carteras colectivas

18

BUSINESS FINANCE

Colfimax Factoring Liquitech Iproveedor Colletpay Siigo Fisapay

9

Minka NetM Buda

Lyntik Tekbee Garantías Comunitarias

2transfair lleida.net Mereigua

WEALTHTECH

BancaValor Intrades Contrato marco Markes solutions

3

IBAN Crediseguro Athena Bitcoin

REGTECH

SoyYo Truora ReconoserID

4

Ualet Hola Préstamo Platiti Exponencial Confirming Biocredit Mesfix

CRYPTO

Witcash Valiu Beriblock

9

facturaenlinea.co Libera Alegra Billy CarteraOK Omnibank

2

NEOBANKS

Oink Nequi

INSURTECH

123SEGURO Teca Seguro kanguro

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