Colombia Leads the Region’s Fintech Ecosystem Segment in Financial Inclusion

According to a study entitled “Driving Financial Inclusion: The Impact of Fintech in Colombia”, conducted by Banco de la República, Universidad de Los Andes, Juancho Te Presta and Colombia Fintech, Colombia leads the fintech ecosystem segment in Latin America in financial inclusion.

The preliminary report, which seeks to measure the impact of fintech companies in boosting access to credit services in the country, based on data from the association and companies in the sector such as Juancho Te Presta, shows that financial inclusion, through this type of entities, has a “greater impact” on those who were outside traditional banking, by providing “better” conditions than the banking system in terms of access, flexibility, technological innovation and speed in the approval process.

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How the fintech sector in Colombia eases access to finances

It also showed that access to credit through fintech companies has an impact on the demand for this type of services in the regulated financial sector, “in consumer, commercial, mortgage and microcredit portfolios, with initiatives that promote and facilitate access to financial products. In the case of commercial credit, there was evidence of a greater impact related to the conditions and interest rates offered by Fintechs,” explained María del Pilar López Uribe, professor at the Universidad de los Andes and researcher at Colombia Fintech.

This is due, according to the report, to the flexibility in their risk assessment processes that go beyond the traditional credit history, since they allow people who do not have such history or who have a negative report before the credit bureaus, to access digital credits and improve their financial history, which will then help them to access traditional banking.

For his part, Juan Esteban Saldarriaga, founder of Juancho Te Presta, highlights that fintech companies have managed to transform the financial sector by confronting conventional models, taking advantage of technology to innovate in credit evaluation, and offering more “accessible and flexible” services. “We, as an industry, are paving the way for a greater number of people, including those historically excluded, to access credit opportunities that had previously been out of reach,” added Saldarriaga.

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First published in LR LA REPUBLICA. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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