Fintech Companies in Colombia II. Challenges and achievements by Ediciones Book Tech

FINTECH COMPANIES

IN COLOMBIA ΙΙ

Challenges and achievements Javier Raventós

Javier Raventós

CREDITS AUTHOR / Javier Ignacio Raventós Núñez EDITORIAL COORDINATOR / Javier Ignacio Raventós Núñez DESIGN / Beatriz Osuna Patiño TRANSLATION / Héctor Galindo, Javier Raventós PRODUCTION DIRECTOR / Germán Izquierdo Orejuela PREPRENSA DIGITAL / One Services. PRINT / Promograf S.A.S. EDITORS / José María Raventós – Javier Ignacio Raventós Núñez STOCK IMAGES / Freepik Páginas: 10, 16, 23 26, 29, 31, 34, 38, 127, 162, 166, 169, 170, 181, 189, 191, 192, 193, 194, 198, 200, 205, 207

ISBN / 978-958-56194-8-7 All rights reserved; reproduction prohibited Total or partial without the express approval of the author. This book was finished printing in Colombia in june 2021 First edition

CONTENT 4 PRESENTATION

Andrés Albán, CEO Puntored

6 FOREWORD

Javier Raventós, Academic & Innovation Director JMR Comunicaciones

8 TOWARDS A MORE

INTEGRATED FINANCIAL SYSTEM (SEAMLESS FINANCE, “FINLESS”) Juan E Saldarriaga L., Fintech Entrepeneur, Cofounder Colombia Fintech, Ceo Juanchotepresta

11 CRISIS OR OPPORTUNITIES?

Hernando Rubio, CEO MOVII

13 FINTECH ON THE POSTPANDEMIC STAGE

Erick Rincón Cárdenas, Colombia Fintech President

15 DECREE 1692 OF 2020: MODERNIZATION

OF THE LOW VALUE PAYMENT SYSTEM FINANCIAL REGULATION UNIT (UNIDAD DE REGULACIÓN FINANCIERA) Felipe Lega, URF

18 FACTORING AS A FINANCIAL TOOL FOR

SMES IN TIMES OF CRISIS Alexandra Mendoza, CEO/Founder - Liquitech Capital Con Sentido Sas - Factoring Fintech 20 LEADING WOMEN: THE GREATEST

OPPORTUNITY FOR LATIN AMERICAN FINTECH Andrea Giraldo, Vice President Corporate Affairs & People Avista

24 FINANCIAL INCLUSION FOR ECONOMIC

GROWTH AND REDUCING INEQUALITYJuan Pablo García, Subdirector Science, Technology and Innovation, Departamento Nacional de Planeación

36 CROWDFUNDING REAL ESTATE INTER-

VIEW WITH: GERMÁN JARAMILLO, FOUNDER & CEO INVERTI

40 CONSENSUS, TRUST, AND CONSERVA-

TION: THE UNIQUENESS OF BITCOIN Alejandro Beltrán, Cofounder AND Country Manager Buda.com

43 COLOMBIA, A CASHLESS SOCIETY?

Enrique Candanoza, CEO Evertec Colombia

46 COLOMBIAN FINTECH DATA

Colombia Fintech, CVN

51 REDEFINING AND EMPOWERING AN IN-

DUSTRY: THE FINTECH ARRIVED TO STAY Camila Salamanca, Executive Director ENDEAVOR

53 FINTECH AS A SERVICE: A NEW ROUTE TO

ENHANCE DIGITAL FINANCIAL INCLUSION Andrés Albán, CEO Puntored

56 FINTECHS ARE HERE TO STAY

- WHICH IS GREAT NEWS! Nuno Lopes ALVES, Senior Vicepresident Andean Region VISA 58 FINSOCIAL 66 ECOLLECT 74 PAYVÁLIDA 82 SUPER PAGOS 90 KUENTA 98 VAKI 106 LIQUITECH 114 INVERTI 122 SOPHOS, 130 EXPERIAN

27 FINTECH AND INSURTECH: EXPLORING

138 LYRA

NEW HORIZONS Santiago Botero Jaramillo, CEO Finsocial

146 TYBA

30 FINANCIAL INCLUSION AND OPPORTUNI-

TIES FOR FINTECH COMPANIES Freddy Castro, Director Banca de las Oportunidades (@freddykastro)

154 JUANCHO TE PRESTA 162 PAYU 170 ENDEAVOR 178 COINK

33 THE CHALLENGES OF THE PROPTECH RE-

186 D´UNA

VOLUTION Andrés Leal, Proptech entrepreneur, Ceo triarii and Founder and Ex managing director of Proptech Colombia Association

194 SU RED 203 AFFILIATES ECOSYSTEM 208 ACKNOWLEDGEMENTS

CONTENIDO |

PRESENTATION ANDRÉS ALBÁN

In the last years we have seen an exponential growth of Fintech companies in Latin America, with Colombia being one of the countries that has lead this trend. The opening of this industry is mostly due to regulatory developments in the countries that have given the entrepreneurial ecosystem incentives for greater competition, reflected in the growing foreign investment and the emergence of new companies in each category of the sector. This is reflected in the second edition of Fintech Companies in Colombia. Their challenges and achievements, where Javier Raventós makes an account of the various companies in different categories of Fintech verticals, covering: Insurtech, digital credit, digital payments, among others, and makes an analysis of issues of open banking, the future of Fintech alliances and the tokenization of currencies thanks to the block chain in articles with the participation of experts from different areas. Additionally, it includes perspectives from influential organizations such as Endeavor, in which it relates how the Fintech industry has gained strength in this important

4 | FINTECH COMPANIES IN COLOMBIA ΙΙ

CEO PUNTORED

entrepreneurship network and highlights the work of the founders of the most representative companies in the sector. In addition to the above, Fintech solutions have proven to be important promoters to achieve the financial inclusion of individuals, companies, independent workers and ventures of different characteristics, where alternative financial services are generated and coexist in an ecosystem of free competition through cooperation. In addition, it is remarkable the opportunity of formalization that merchants have and the access to financial services in rural and hardto-reach populations through these innovative solutions. Colombia Fintech, through its sectorial report “Fintank”, estimates that by 2020 in Colombia there are 322 companies classified in 9 verticals or segments, among which digital credit and digital payments have the majority of players in the market, adding approximately 50% of the representation.

Likewise, this sector, which generates more than 9,000 jobs, had an overall growth of 36% in the number of companies incorporated between 2017 and 2020. Likewise, for the past year, the identification of numerous entrepreneurship initiatives as a response to the need to create business models based on technology due to the pandemic of Covid - 19. In our case, Colombia in 2020 implemented more than 10 regulatory modifications opening more spaces for innovation in the fintech ecosystem. Among these regulatory milestones it is worth highlighting Decree 1692 of December 18, 2020, through which the national government defined the rules applicable to electronic payment systems, in order to increase the percentage of adults who make online purchases or payments. Likewise, the improvements of the Decree that defined new guidelines to develop crowdfounding, in which the maximum financing amounts were increased to close to $50,000 million or the regulation of the financial sandbox

to test technological developments in a formal manner through a temporary license granted by the Superfinanciera. For its part, the banking sector has consolidated its commitment to innovation and digitalization of channels and products, improving the offer and experience of its customers when using its channels. In this sense, due to the situation generated by the covid 19 pandemic, digital wallets and purses grew exponentially, consolidating themselves as the alternative place for the savings of millions of Colombians who have access to these solutions. We hope you enjoy this volume and have an approach to the main companies and trends of the Fintech industry in Colombia, accompanied by the business models of a representative group of Colombian ventures that join efforts to achieve financial inclusion in the country.

ANDRÉS ALBÁN |

FOREWORD

JAVIER RAVENTÓS ACADEMIC & INNOVATION DIRECTOR JMR COMUNICACIONES The Fintech ecosystem, we can say that it has several verticals: Digital Credit, Digital Payments, Business Finance, PFM & Wealthtech, Regtech, Crypto & Blockchain, Insurtech, Crowdfunding and Neobanks. In Colombia our ecosystem every day has more companies that belong to one of these verticals, generating employment, helping entrepreneurs, government and people, through their services, products and technologies. In this second issue of Fintech Companies in Colombia. Your challenges and achievements; we will find fascinating articles, written by professionals with great experience, both in the private sector and in the public sector. Each one from their perspective shares very valuable information, very interesting points of view and analysis of the current situation in our country. These great professionals include: Santiago Botero, Erick Rincón, Germán Jaramillo, Andrés Albán, Hernando Rubio, Juan Esteban Saldarriaga, Alexandra Mendoza, Freddy Castro, Andrea Giraldo, Enrique Candanoza, Juan Pablo García, Felipe Lega, Alejandro Beltrán, Camila Salamanca and Nuno Lopes Alves. The Fintech ecosystem in Colombia, even in times as difficult as the current one, we see

6 | FINTECH COMPANIES IN COLOMBIA ΙΙ

very interesting figures and an upward trend in the creation of new ventures and strengthening of those already present. We see how large investment funds are betting on the talent, work, dedication, effort and technological developments of the different companies of the ecosystem in our country; considered the third in the region. We will also learn about the valuable work that different companies have been developing, in different verticals of the ecosystem, their passion, effort, dedication, vision. Finsocial, which never stops surprising me, we will get to know its different companies around it, which are beginning to succeed under the same innovation ecosystem and the valuable social contributions that they have been developing through its foundation. ecollect that with its technology is effectively solving the correct identification of the different means of payment of the companies through its platform. Payválida, one of the first payment gateways to implement cash payment, which has allowed greater financial inclusion for the population. Superpagos, with more than 100 million transactions / year and more than 20 million users using its transactional ecosystem, helping digitized financial inclusion. Kuenta, with a methodology

that not only streamlines the credit system, but also strengthens legality and fraud prevention, integrating each link in the credit chain. Vaki, democratizing financing in Latin America. Liquitech, with a factoring platform, which works and helps with a social sense, has become a great help for companies at this time of pandemic to have liquidity. inverti, the first real estate crowdfunding, which will soon become a great reference for investing in the real estate sector. Sophos, helping technological transformation, with world-class services, with a “software as a service” model. Juanchotepresta.com, with its agile and online credit solutions for people who need it. Experian, which with its valuable data and intelligent analysis tools, provides greater confidence when developing risk models for credit approval and client management to Fintech companies. Lyra, with its payment platform, constantly innovating, pioneers and creators of the WhatsApp payment functionality, certified with 3D Secure.

merchants of all sizes; He is also an investor in the Fintech ecosystem. Endeavor, who supports numerous Fintech companies in Colombia, through its services of connections, consultancies, participation in events, search for capital, education programs, access to world-class talent, among others. Coink, promoting financial inclusion with purpose and in a fun way and is now part of the pilot of the Financial Superintendence of Colombia in the cryptoassets project. D´Una, a combination between insurtech and lending, where through its platform and points of sale we can acquire the SOAT. Sured, one of the largest networks in the country, with more than 12 thousand direct points, generating more than 39 thousand jobs, providing money transfers, collections, payments, banking correspondence, credits and education. I hope you enjoy this work, the same as I have enjoyed doing it, learning from all these stars.

Tyba, a mobile application created to help save and invest from very low amounts, available to everyone; the app works as a digital investment advisor. Pay U, a leading provider of online payments, sold nearly $ 5.5 billion in 2020, a boon for

JAVIER RAVENTÓS |

TOWARDS A MORE INTEGRATED FINANCIAL SYSTEM (SEAMLESS FINANCE, “FINLESS”)

JUAN E SALDARRIAGA L. FINTECH ENTREPENEUR, COFOUNDER COLOMBIA FINTECH, CEO JUANCHOTEPRESTA

2020 will be one of the most difficult years to remember. It will be a year of innumerable lessons and questions both on a business and personal level. As someone said: “We learned in 2020, we will apply what we learned in 2021!” Hopefully, humanity will understand that if we do not take care of the planet, we cannot expect the planet to take care of us. In finance, as other industries, the COVID-19 pandemic has produced challenges which banks and fintechs will try to exploit. less use of cash, contactless payments, alternative assets seeking profitability such as cryptocurrencies. (i.e. Bitcoin achieved record heights the 1st week of January 2021), increase in e-commerce and the use of social networks such as “financial supermarkets”.

8 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Inside the 100 fastest growing companies reported by the Financial Times, a significant percentage are fintech companies.1 The virus has transported us to the future. Events expected to come to pass in 5 or 10 years have accelerated exponentially. (e.g. teleworking, video conferences and digital purchases.) Many call this accelerated digitization process, “techceleration.”2 In the midst of this digital fever, a new business model is emerging and new entrants are joining. Banks, e-commerce sites, fintechs, social networks, taxi apps and telecommunications companies are competing to become “platforms”. 1 Prospering in the pandemic: 2020’s top 100 companies, The final ranking of corporate winners in a devastating year. Financial Times. 2 The Economist | After the tech-celeration

(i.e., markets through which users can buy a range of their own financial products or third parties.3 Integrated finance extends banking and payments beyond the walls of financial institutions. People want to make banking transactions with the brands they love. Some of the world’s biggest brands such as Amazon, Apple, and Uber understand that providing financial services deepens relationships with customers. Our current fintech companies, usually a single-product company, seek to take away participation from traditional operators. Often, we develop our own technology supported by infrastructure. Infrastructure provided by the regulated financial system or our traditional business partners. This Fintech 1.0 version has significant challenges in bringing products to market, particularly with the need to build technology layers and regulatory compliance. On the contrary, “new platforms” have been developed that allow companies to integrate into an ecosystem of services. These Fintech 2.0 platforms argue that connecting to their networks can be cheaper and more efficient for fintech and traditional brands looking to implement integrated financial services offerings. The future of embedded finance is about enabling platforms rather than single product offerings! As traditional companies and retailers develop financial offerings, they all have become competition for the banks. Brands with significant positioning have opportunities to develop their customer base by adding integrated financial services. As a result, banks face competition not only from fintechs, but also from big tech players like Google, Amazon, Shopify, and non-financial brands.

Integrating financial products for medical and insurance applications are some of the examples of industries that have been accelerating the “finless”. In the field of business-to-business payments, integrated solutions are adding value for small businesses through tools such as eFactoring, access to earned wages (online advances), virtual cards and automated expense management. They are other examples of “embedded finance”.

Integrated finance is therefore developing in stages.4 Distribution as a service: The first stage focuses on the distribution of financial services through existing platforms. The best example is Asia, where the central problem continues to be distribution and education. As such, these companies tend to focus on building an ecosystem of services that aim to become deeply embedded along the value chain within their specific vertical (many in transportation and homes or ecommerce). Some of companies in this space are Shopify, Udaan, Grab, etc. Connectivity as a service: The second stage focuses on connectivity between fintech and non-fintech companies. It is an acknowledgment of the reality that financial services are incredibly difficult to manage well. The catalysts for this are two: regulators who insist that products and services remain under the control of banks, and banks themselves seeking to participate in the vanguard of financial technology. By focusing on connectivity, these companies accelerate the proliferation of financial services. Companies in this space include Flexmoney, Plaid, Instacred, etc.

Rather than going after general audiences, fintechs, banks, and non-financial brands will turn to integrated solutions to search for niche categories and specialized client groups.

Infrastructure as a service: The third stage focuses on the native integration of financial processes through an existing platform. As platform ecosystems grow larger with increased payment / transaction flows on the platform, the reliance on external financial processes (payment processing, KYC, etc.) becomes more noticeable. Businesses in this space are focused on enabling existing ecosystem players (for example, Shopify) to offer their own white-

3 https://www.economist.com/finance-and-economics/2020/10/08/ how-the-digital-surge-will-reshape-finance

4 https://medium.com/swlh/an-introduction-to-embedded-financea4d64302757d

JUAN ESTEBAN SALDARRIAGA |

label financial infrastructure. By focusing on infrastructure as a service, they are enabling stronger proprietary financial ecosystems. Providers of this “infrastructure as financial services” enable technology companies to more efficiently activate and scale financial services capabilities using fewer internal resources. These providers are revolutionizing the unit economy for the launch of banking and payment services. The dozens of startups currently in this sector often present themselves as providers of ‘payments as a service’ or ‘banking as a service’. This brings us to one of the best definitions of integrated finance: They are financial solutions that appear just when the client needs them.5 Integrated finance is not designed to be finance at all. When we create a user experience that addresses pain points, whatever they may be, we also incorporate a financial element that is integrated finance. The end user shouldn’t really notice the finances if they are properly integrated; it just becomes part of the product. The winners of this Fintech 2.0 revolution will be those companies with the ability to merge and exploit data stored for a long time in different financial services. Armed with a complete picture 5 https://11fs.com/article/what-is-embedded-finance

10 | FINTECH COMPANIES IN COLOMBIA ΙΙ

of their users’ behavior, these companies hope to use algorithms that provide suggestions on, for example, the best savings product, the correct term of your credit or the best insurance for your holidays. That will make these platforms even stickier and allow them, in turn, to recommend even more products. Finance has always been a “systemically critical” infrastructure for business and commerce. The future of financial services will be profoundly affected by the emergence of integrated finance - finance that promises to be more intimate, more interconnected, and customizable.6 The evolution of each of these stages, and the interactions between them, will reveal even more synergies between financial services and virtually any other industry. We are at a key inflection point where fundamentally new business models will emerge and flourish. These new models will unlock and create enormous value for our society in general and for shareholders in particular.

6 https://tearsheet.co/wp-content/uploads/2019/11/AnthemisEmbedded-Finance-White-Paper-November-2019.pdf

CRISIS

OR OPPORTUNITIES? HERNANDO RUBIO

We never imagined that our generation would have to live and handle a crisis like Covid. It has been ruthless, especially with the most vulnerable people, and has set us several years behind on such important issues as the race against inequality and poverty. Unfortunately, it is the lower-income people who have had the hardest time (as usual). Many entrepreneurs and friends ask me every day how the crisis has gone: I answer that, as a good entrepreneur, I have lived in crisis since I decided that this would be my way of life; that for those of us who are in the task of understanding problems that affect millions and how to solve them through technology, the crisis is our “usual” way of living and we have become accustomed

CEO MOVII

not only to handling it with a smile and with our eyes of faith, but also to find the positive side of everything. This crisis, which has been so strong, is an opportunity. That is why I think it would be a monumental mistake not to take advantage of it, because just as it has brought many difficult moments, it is also true that it has brought positive things, such as the change in digital adoption that accelerated dramatically: what was supposed to happen in 5 years passed in just 3 months. Millions of people who resisted using digital financial products to make their lives easier and still close to their good friend, the cash; they were

HERNANDO RUBIO |

services for the second half of 2020 and growth is expected to be higher this year. Those of us who were ready with a 100% digital product, with good usability, focused on the way customers want to be treated today, had exponential growth. Wallets had their August in 2020, they all grew because it was what people were needing. According to Banca de Oportunidades, during 2020 1,600,000 accounts were opened in the country to people who had never had one before, resulting in 14,533,000 unique customers in the system. Transactions also increased in a very relevant way and this helped millions of people who had not opened an account to do so and for millions who had opened it but did not use it, to use it for the first time.

forced by the quarantine to pay their bills from a cell phone, to recharge their phones from home, to send money without having to travel and most importantly, to buy online. The example that I like to give the most is that of my mother, who enjoys her pension that is recorded in her account every month and that despite my insistence, asking her to download MOVii and make her payments without leaving home, she always replied that for her it was a plan to go once a month to withdraw all the money at the bank branch and “make her returns” of payments. Seeing her face the day she paid her bills from home, that she was able to pay her employee by transferring from her cell phone and that she asked for addresses and payment online, reminded me of the day when a couple of years ago I teach her to send messages by WhatsApp and she said she wouldn’t use it; today every morning she fills me with messages, chains and videos that fill the memory of my cell phone, but go and tell her not to do it. Due to the covid, the use of digital products in the financial sector increased exponentially: We went from a use of 66% at the end of 2019, to 71.6% in June 2020. That is, 25.8 million people were using digital financial

12 | FINTECH COMPANIES IN COLOMBIA ΙΙ

For the Government, all this has been very useful, because in the midst of unemployment that grew uncontrollably (especially in the informal sector) it was an immediate need to create a program of aid to the most vulnerable population to mitigate in some way the blow that would make us go back years in poverty indicators. This is how the Solidarity Income program emerged, which in a few weeks managed to reach almost 3 million people, many of them without access to financial services, so that they had a basic income that would allow them to live. With this program, it is possible not only to deliver the money but also to increase the coverage of financial services in the country through digital products, easy to use and that stimulate use, not the withdrawal of cash as had been the custom until now. Wallets are beginning their journey so far, in the next 5 years we will advance more than what was advanced in the last 50 in financial inclusion through creating products that understand the need of the true Colombia, that of stratum 1, 2 and 3; which are 80% of the population. Only by obsessing over understanding their needs, their pains and how technology and a new inclusive and sustainable business model can make life easier for millions who have it difficult, we will have a less unequal and fair country, a country in which anyone or commerce can pay or be paid digitally. This is a dream that we can fulfill it if we all push in the same direction.

FINTECH ON THE POSTPANDEMIC STAGE

ERICK RINCÓN CÁRDENAS

COLOMBIA FINTECH PRESIDENT

The year 2020 was atypical for humanity, COVID-19 brought with it a series of notable changes in organizations that revealed the deficiency in the development of digital transformation processes in the business sector. This was a year in which the landscape changed dramatically, forcing organizations to redefine and implement short-term strategies in order to guarantee the continuity of their operations in an environment with projections still uncertain due to the advances of the pandemic. However, in this adaptation process, many small and large companies have managed to carry

out their operations efficiently and creatively, discovering new information channels and digital developments that make it easier for consumers to purchase products and services from the safety of their home. The accessibility and easy handling of new technologies are and will be one of the determining factors in the reactivation of the economy. It is inevitable not to pose a scenario of uncertainty regarding the post-pandemic stage, especially when we talk about the financial recovery of

ERIK RINCÓN |

society, its effects and consequences. However, the digitization of the financial industry has in turn developed alternatives for expansion and adaptability in the face of the new reality that both entrepreneurs and individuals have had to experience. The concern that has been generated worldwide about the future, and the adaptation process that this new stage implies, has given rise to the Fintech sector playing an important role in economic restoration and in digital transformation processes, providing solutions effective ways to rethink and restructure the financial model, based on assertive solutions with more flexible, dynamic and efficient approaches. In the post-pandemic context, it is necessary to offer easily accessible products and services according to the reality that is coming, in order to guarantee progress in economic development. In this environment, alternative financing via digital credit, collaborative financing - crowdfunding, and electronic invoice negotiation - factoring - are essential to provide liquidity to broad segments of our society. One of the lessons learned from this pandemic has been to understand the importance of simplicity, which is why it´s intended to improve practices and reduce bureaucratic processes. There will always be the need to carry out financial operations during and after the pandemic, which generates a high demand for technological services and has made us increasingly dependent on digitization. Faced with this challenge, Fintech aims to improve the quality of life of the population and diversify solutions, in order to provide ingenious, active and practical responses, aimed at optimizing the use of financial services, reducing the use of cash and simplifying financial operations. This has required a capacity for change and receptivity to the new modalities of financial access, to be able

14 | FINTECH COMPANIES IN COLOMBIA ΙΙ

to adapt to fluctuating commercial conditions that may arise from any supervening event. The COVID-19 pandemic demonstrated the fragility of the system in the face of unforeseeable crisis, and consequently, it is proposed to give way to technological innovation as an instrument to achieve the economic recovery of the country, which requires a mandatory change in the traditional ways of operating. On the other hand, it`s important to provide support to MSMEs, which represent a large percentage of companies in Colombia, as well as natural persons, especially those who have had great difficulties regarding financial inclusion for many years. The protection of entrepreneurs and vulnerable people against the impacts caused by the health contingency, seeks that these people have the possibility of accessing practical solutions when undertaking businesses digitally. An inevitable change is emerging in people’s financial behavior, which represents an opportunity for the development of activities that involve virtual experiences and the massive integration of people into the financial system through digital solutions. The post-pandemic world will not be the same, and the use of technology will be immersed in the transformations resulting from this. Innovation capabilities will be required to create technologybased financial systems, resulting in an important time for the transition in fintech. Fintech, committed to redefining the future based on the current context, will continue to have financial inclusion as its purpose, especially for those who do not have access to traditional financial services. It is everyone’s commitment to redirect the change towards positive solutions, in order to restore the economic stability that has been violated in these times.

DECREE

1692 OF 2020:

MODERNIZATION OF THE LOW VALUE PAYMENT SYSTEM FINANCIAL REGULATION UNIT (UNIDAD DE REGULACIÓN FINANCIERA) FELIPE LEGA

Financial inclusion is a powerful tool for economic development by enabling people to improve their savings, risk management and investment capacities.(1). On this front, Colombia has advanced significantly since 2006, with the definition of a public policy that has allowed the financial system to expand throughout the country and increase access to these services. Today, more than 83% of the population have a financial product, an increase of approximately 30 percentage points in the indicator during the last decade. This progress can be accelerated by digitizing payments, as they provide valuable information for credit risk analysis, especially for those who doesn´t have traditional guarantees. Digital

URF

payments also promote formalization and are more secure and efficient than cash.(2) Colombia has a great opportunity to advance on this front. Only 20%(3) of stores accept electronic payments and 10% (4) of transactions in the economy are made through these channels. And although there are more than 81 thousand debit cards for every 100,000 adults(5), 80% of the transactions correspond to cash withdrawals(6). In order to reverse this situation, the National Government issued Decree 1692 of 2020 through which the regulation of the low-value payment system is modernized. With this reform, Colombia joins the list of countries that, such as Brazil and Mexico, have recently transformed

FELIPE LEGA |

their payment infrastructures and consolidates efforts to generate a regulatory framework conducive to financial inclusion(7).

PILLARS OF THE REFORM OF THE PAYMENT SYSTEM The payment industry in Colombia has a high concentration of players and lags in front of international technologies and practices(8). Based on this diagnosis, the National Government prioritized the regulatory update of the sector to achieve a more efficient operation of the transactional market. With the technical support of multilateral entities and after extensive participation by the industry through working groups, the National Government issued Decree 1692 of 2020 that lays the bases for a new digital infrastructure.

16 | FINTECH COMPANIES IN COLOMBIA ΙΙ

On one hand, the reform expands the principles of security and stability that govern the operation of the system with the need to also ensure access, efficiency and innovation. Along the same lines, it adds to the surveillance objectives that of ensuring that system administrators have good corporate governance standards in addition to managing the risks of their activity. In development of the foregoing, it sets in the head of the participants a duty to refrain from arbitrarily restricting the entry of new players and guarantee equal treatment to the different participants. In turn, the decree adjusts and expands the glossary corresponding to the industry in order to specify the activities, actors and roles. In this line, in front of the system administrators, and in order to avoid conflicts of interest, the regulation determines that when they carry out the work of clearing and settlement of payments, these entities will not be able to carry out other activities of the system.

In general, the decree strengthens the corporate governance scheme of these entities, from the composition and operation of their boards of directors, as well as the setting of new duties to avoid tied sales practices or exclusivity in the provision of services related to the composition. and liquidation. Likewise, the obligation to improve their practices for releasing information on rates and costs in order to have greater transparency in the market. Finally, the decree expands the acquiring activity so that it can be carried out not only by credit institutions but also by SEDPEs and non-financial entities. With this adjustment, it is expected to promote the arrival of new players, with operating models focused on facilitating small businesses and entrepreneurs to make their sales digitally. These non-financial acquirers must register with the Financial Superintendency, comply with prudential requirements that ensure their proper functioning and maintain the resources in a financial entity.

FUTURE CHALLENGES Decree 1692 of 2020 is an important reform of the payment system that seeks to strengthen the transactional market as a channel for financial formalization and inclusion. It also generates the bases of a new transactional infrastructure on which new models of financial service provision can be developed and favor the digitization of the economy. Following the vision embodied in the public policy document For Greater Development of the Financial System (Ministry of Finance, 2020), the National Government will continue to promote an adequate regulatory environment for financial innovation. Particular emphasis will be given to the discussions that emerge from the greater access and benefit of information, such as that of open banking. Under this model, the consumer gains control and autonomy over their data and has at their disposal new ways to share their information with other financial entities and third parties.

Recently, the Financial Regulation Unit published a study for comments from the industry in which it proposes to adopt the open architecture standard in Colombia, following a voluntary model but oriented under specific guidelines that ensure its correct development. Throughout the year 2021, the construction of said regulatory framework will be carried out, encouraging the participation of the industry in a broad way. 1 CGAP (2015) Achieving the Sustainable Development Goals the Role of Financial Inclusion. 2 En Kenia, por ejemplo, habilitar pagos digitales para los hogares no incluidos financieramente generó un aumento de 8% en sus ingresos y un aumento de 2% en el PIB entre 2008 y 2012. Ver: World Bank, Better Than Cash Alliance y Bill & Melinda Gates Foundation (2014) The opportunities of digitizing payments. G20 Global Partnership for Financial Inclusion. 3 La República (2018) “Los pagos electrónicos llegan a 80.000 de las 450.000 tiendas de barrio”. 4 BTCA (2015) Country Diagnostic: Colombia. 5 Banca de las Oportunidades (2017) Reporte de Inclusión Financiera. 6 URF (2018) Estudio sobre los sistemas de pago de bajo valor y su regulación. 7 URF (2019) Estudio sobre los sistemas de pago de bajo valor y su regulación. 8 URF (2020) Actualización normativa de los sistemas de pago de bajo valor – Memoria del decreto 1692 de 2020.

FELIPE LEGA |

FACTORING AS A FINANCIAL TOOL FOR SMEs IN TIMES OF CRISIS

ALEXANDRA MENDOZA CEO/FOUNDER - LIQUITECH CAPITAL CON SENTIDO SAS - FACTORING FINTECH

WHAT IS FACTORING? Factoring is a tool that allows companies to obtain liquidity by selling their accounts receivable, mainly in invoices, in exchange for a discount on their initial value that is linked to the due date for payment by the end customer. For example, if you have a company that provides a service to a customer who agreed to pay you in 60 days, through factoring you can have the resources in advance without having to wait until

18 | FINTECH COMPANIES IN COLOMBIA ΙΙ

the agreed due date, thus enabling you to fulfill all your commitments and continue providing the service to your customer.

How has factoring evolved in Colombia? Factoring in Colombia is a relatively new tool that began to be organized in 2008, since previously there were no legal grounds to regulate its activity in the country. For this reason, in 2008, Act 1231 of 2008 was passed, commonly known as the Factoring Act, which provides the criteria

for an invoice to be considered a security and start operating as a financing mechanism. Then, Regulatory Decree 2669 of 2012 complemented the Factoring Act, giving guidelines on conducting this activity to commercial entities other than Banks. It has been evolving positively; however, there is still a lot of market to explore because there are currently many SMEs unaware of such concept and many payers, usually large companies, put obstacles in the factoring operations regardless of the law. So, this is a task that must continue in order to reach levels like those in Chile, where factoring transactions contribute more than 12% to its GDP, or Spain, where it amounts to more than 20%. The implementation of electronic factoring as a financing mechanism through the new RADINA is currently underway in the country, which involves major technological and operational challenges, but will certainly achieve even more democratization of this practice and therefore increase the possibility of SMEs to access financial services.

What has happened to this process during the months of exceptional measures ordered by the Government? Today, companies such as Liquitech have been providing factoring services digitally through electronic platforms, which has allowed invoicing transactions to continue online despite the emergency situation. This has become an important solution for SMEs and their customers that injects liquidity into the operating cycle that includes them both, because when the provider, which is generally an SME, has no liquidity, the entire production circle or service provision will have problems.

How does factoring contribute to financial inclusion and economic reactivation? In different ways. In Colombia, many MSMEs have no access to bank financing because credit policies are based on the companies’ history and not on their present or future, whereas

in factoring what matters is an SME’s business relationship with a customer with good financial performance, which ends up being the risk for the factoring company. Therefore, with factoring, MSMEs can fuel their everyday operations through working capital at a transparent cost with no hidden fees, instead of resorting to inconvenient loans that may otherwise be used for other more pressing issues such as investment in plant and equipment. In terms of economic reactivation, factoring also ends up being an injection for the entire system, as it generates liquidity to finance running operations. As I was just saying , it is the fuel that is supplied directly to an operating cycle that is needed by all the actors in an ecosystem. Finally, we can conclude that, with factoring, MSMEs have a tool that will allow them to have working capital to operate, to be able to continue serving their customers’ orders, to grow, without falling into debt, to assume extra-bank costs, outsource their portfolio management and have a clear financial planning of their operating cycle. Today more than ever, we need to power on the productive apparatus to be able to reactivate together as a city, as a region and as a country, and factoring is undoubtedly one of those main switches to achieve this.

Volume of factoring transactions (Millions of Euros) 2017 2018 2019 Europa $ 1.701.939 $ 1.829.142 $ 1.976.239 Norteamerica $ 92.392 $ 90.101 $ 86.742 America Latina $ 117.088 $ 121.248 $132.031 Brasil $ 50.432 $ 47.281 $ 46.711 Mexico $ 23.314 $ 24.477 $ 25.200 Chile $ 22.756 $ 26.500 $ 33.600 Colombia $ 7.655 $ 7.142 $ 7.667 (tomado de Evolution of Global Factoring Volume – Factoring Chains International)

ALEXANDRA MENDOZA |

LEADING WOMEN: THE GREATEST OPPORTUNITY FOR LATIN AMERICAN FINTECH ANDREA GIRALDO

VICE PRESIDENT CORPORATE AFFAIRS & PEOPLE AVISTA

Of the 7 companies that I have had the fortune to work for so far, only in 4 of them I have had a female boss or leader. Of these 7 companies, (all technology-based, and two fintech-specific), the ones with the highest growth, organisation and strategic planning were the 4 before mentioned. We could argue that there were many factors for these 4 companies to meet their growth goals: relevance of product, time -to-market, value proposition, etc., but ,there were two

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distinctive factors that they had in common and that radically differentiated them from the others: 1 they both had a higher percentage of women in middle and upper management 2 they had one or more women as board members and / or C levels and VPs. In 2019, companies with a woman in the seat of chief executive officer (CEO) accounted for only 11% of all venture capital deals (VC funding) made

globally1. However, only 7% of fintech venture capital deals had a woman in a CEO position. Looking at the big picture, we see that only 4.9% of Fortune 500 CEOs and 2% of S&P 500 CEOs are women - a number that is trending down globally. This, personally and professionally, is something that I have never understood: Why multinationals, especially those technology-based, don’t make more efforts to have women in key leadership positions? Not only is there a positive correlation with rising earnings and women in leadership2 roles, but there is also the - not so small - fact that women score higher than men on key leadership skills such as leadership, resilience, development of others, communication, integrity and motivation to others according to a Harvard Business Review 3 study. Thanks to influential work carried out by McKinsey (2007) and Catalyst (2007), a strong positive correlation was also documented between the representation of women on the boards of Fortune 500 companies and corporate performance, which confirms that in fact these are not isolated events. It is a fact that gender diversity in top positions improves the financial performance4 of companies through a number of channels in various types of companies. A greater representation of women brings heterogeneity in values, behaviours, beliefs and attitudes, which broaden the range of perspectives in the decision-making process (OECD, 2012), which in turn stimulate critical thinking and creativity (Lee and Farh, 2004), all of them are key characteristics in any undertaking and, above all, for those who intend to be disruptive. The benefits of gender diversity are seen throughout the organisational structure of a company, for example, an economist at MIT (Massachusetts Institute of Technology) tracked the income and survey results of a large international company during eight years. The study found significant differences in the performance of exclusively male or female offices and offices with gender balance. An equitable gender split can lead to a 41% increase in

earnings, which can be explained by the diverse skills and experiences offered by a diverse and inclusive workforce. Given the well-documented differences in preferences and behaviour across gender lines, important complementarities can also emerge between men's and women's management styles (Croson & Gneezy, 2009), fostering not only steeper growth, but a more homogeneous organisational culture that in the end generates not only business growth but also internal talent, generating engagement, a sense of belonging and results orientation. With the increase of women in the workforce in any company and the increase of their representation in higher positions, it would help to mitigate the gender differences between managers and subordinates, which would improve the productivity of workers (Giuliano et al., 2006 ) -And who wouldn't want this in their company? Some have even argued that female managers could be better positioned to serve consumer markets dominated by women (CED, 2012; CAHRS, 2011) and we know that this is precisely a market that is growing in the fintech scene and more so in LatAm. After reviewing the Inclusive Fintech 50 data and the 2019 Results of the Fintech Benchmarks Proof-of-Concept, two key insights emerge that focus on early stage fintechs : a) There is a gender gap in the client base served by fintech companies, and there is significant room for them to grow by addressing this gap b) Female-led fintechs face unique challenges when raising funds, but when they do, they demonstrate greater revenue-generating potential compared to fintechs without women in leadership positions. This same benchmark reveals that fintechs led by women generate higher revenues: among the sample of 45 fintechs, those led by women had almost three times the revenue per client of fintechs not led by women - a figure that leaves much to think about.

ANDREA GIRALDO |

LATAM OPPORTUNITIES Venture capital leaders, as well as social and sustainable investing, are facing a great opportunity in Latin America that is still lagging behind the leadership and largely female-based clientele that has been so successful in Europe and Asia5. Investors looking at the LatAm market can look for fintechs with strong programs that support female leadership, and begin to discard those that do not in order to secure their investment by producing higher returns. Additionally, gender-diverse hiring practices and training on implicit biases become key as they are vital for investors and incubators / accelerators to achieve these goals. In addition, training on implicit biases plays an important role in raising awareness about credit practices and if in the fintech sector we boast of our ability to break in, to be ahead of time, to provide novel and simple solutions, Why wouldn’t we work on our own biases, some of which might be slowing down our growth?

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The opportunity that is openedto investors is immense; they have the potential to address this underrepresentation by investing in more earlystage, female-led fintechs, particularly in regions such as Asia and Latin America, and to anticipate this market to the improvement trends of the rest of the regions, thus becoming pioneers of inclusion and diversity within fintechs and the exponential growth of these large companies led by 100% rockstars women. How then, could the fintech community grow based on these facts? There are several fronts and they all require a joint effort: 1 Promote more programs for women founders or CEOS of new initiatives -especially those that hope to benefit mainly the population of women in the region. 2 Expand the offer and support of companies founded by women - it is true that women tend to be more averse to risk and that is why having support in the growth of a company or business idea could give that security. 3 Consider career paths within the industry and encourage true leaders to be the

decision-makers and that this is with a truly transparent evaluation without gender biases or gender biases - which also means that we are open to not only be guided by the professional profile or career or area where a person has developed the most, but from within companies we can make a cross-growth where growth to different business areas or knowledge is possible and thus recognise the potential of women to be multifaceted 4 Begin to have a “quota” of hiring women has been an initiative of large companies from other countries, and it begins to overturn that status quo, using this same principle and adopting internal programs made to strengthen and create cracks for those women (since most of the times women do not apply to a position if we do not comply 100% with the profile, while men do) and thus have gender equality targets. Now, it is important to see that women do more than cover a quota when they are elected to leadership positions; In a 2017 report from Morgan Stanley found that more women in business translate into improvements across the board: in productivity, employee retention, innovation, and decision-making which is precisely what we want to see grow in fintech. Companies that adequately utilise the potential of women make better team decisions and have more progress towards innovating new products or lines of business.

This added value is a resource for problem-solving and could lead a company to perform even better than one that lacks gender parity. If we invest in women leaders in the Fintech ecosystem (and in any industry in general), we invest in different leadership strategies, in company revenue and in long-term accelerated growth.

If we invest in women leaders in the Fintech ecosystem (and in any industry in general), we invest in different leadership strategies, in company revenues and growing fast long-term. 1 “Including Women in “Inclusive Fintech”, Maha Khan, Carrie Ruh www.centerforfinancialinclusion.org Aug 27, 2020 2 “Women in business and management: the business case for change” / International Labour Office. -Geneva:ILO, May, 2019 3 “Research: Women Score Higher Than Men in Most Leadership Skills”, Jack Zenger and Joseph Folkman, June 25, 2019 4 Adams, R., and D. Ferreira, 2009, “Women in the Boardroom and Their Impact on Governance and Performance,” Journal of Financial Economics, Vol. 94, pp. 291–309. 5 “Inclusive Fintech 500”

ANDREA GIRALDO |

FINANCIAL INCLUSION FOR ECONOMIC GROWTH AND REDUCING INEQUALITY

JUAN PABLO GARCÍA SUBDIRECTOR SCIENCE, TECHNOLOGY AND INNOVATION, DEPARTAMENTO NACIONAL DE PLANEACIÓN

INTRODUCTION The economic panorama of the country requires decisive actions that increase the levels of productivity and innovation. In recent years, the contribution of productivity to economic growth has been negative, less than 20% of companies are considered innovative, and the levels of diversification and internationalization have remained constant (DNP, 2019). In particular, the uneven development of the financial system

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has delayed the adoption of financial tools by individuals and companies to connect to the formal economic circuit and develop productive initiatives. Such are the circumstances, that in 2019 only 66% of the country’s adult population and 68% of companies had an active financial product (Banca de las Oportunidades, 2020). To handdle this situation, the national government and the financial services industry have promoted financial inclusion with both long-term efforts

and emergency measures, including those used to counteract the effects of the pandemic caused by COVID-19. The launch of the Banca de las Oportunidades Program, the banking correspondents and the companies specialized in electronic deposits and payments (SEDPE) illustrate the joint long-term efforts. Within the shock measures, the “Ingreso Solidario” Program achieved in three months that 759,000 of their beneficiary households accessed or reactivated a deposit product for the first time (Banca de las Oportunidades and DNP, 2020). The national government is committed to maintaining the achievements obtained and reaching new frontiers in terms of the quality of financial services and the well-being that financial consumers derive from them. This article presents the most important actions agreed in the most recent CONPES policy documents related to the financial services industry, and invites the private sector to become an ally of these initiatives.

POLICIES FOR FINANCIAL INCLUSION AND ENTREPRENEURSHIP In the Policy of Inclusion and Economic and Financial Education (CONPES Document 4005) financial services are considered the way by which people and companies achieve their consumption, production, savings and investment objectives; In this sense, it understands the positive effect that a deep and efficient financial system has on growth and the reduction of inequality (Levine, 2005); it also recognizes the need to adopt balanced financial supervision and regulation policies that ensure macroeconomic stability, minimize systemic risks and, in turn, provide fertile conditions for increased competition and innovation. In this context, the document seeks to integrate financial services into the daily activities of citizens and MSMEs to contribute to the growth and financial inclusion of the country (DNP, 2020).

Regarding inclusion in the transactional field, the document shows a considerable lag in the number of debit cards and dataphones with respect to regional pairs, and a share of cash in transactions in the economy close to 80%, evidencing a low level of electronic payments (Arango et al., 2020 and Banco de la República, 2020). The policy finds that part of this lag is due to the market structure of low-value payment systems (SPBV). Recognizing the value of transactionality for financial inclusion, the document commits actions to encourage the entry of players who offer products and rates for underserved market segments. In particular, the DNP will propose tools to support the efforts of the Normative Projection and Financial Regulation Studies Unit (URF) that seek to increase competition in the SPBVs. In the area of financing for the MSME segment, the policy establishes actions to reduce information asymmetries that restrict the flow of credit to companies with reduced interaction with financial services. International experiences show that credit scores fed with non-traditional information increase the ability to identify the credit risk of both old and potential clients (Berg et al., 2018). With these foundations, the DNP will formulate recommendations to create and use credit ratings that use non-traditional information in order to reduce information asymmetries and promote access to financing. Both the financial inclusion policy and the National Entrepreneurship Policy (CONPES Document 4011) agree on the need to expand the financing mechanisms of dynamic entrepreneurship and innovation, which by nature are highly risky and, therefore, a difficult market to reach. traditional banking. To this end, the DNP will propose regulatory, accounting, and tax schemes to promote the use of quasi-capitals to finance startups in their initial stages. In addition, with the support of the Korean cooperation and the IDB, it will implement a pilot of technological guarantees for the financing of companies that use scientific and technical knowledge in the development of innovative products and processes. Finally, although Law 1676 of 2013 enables the use of intellectual property assets as security interests,

JUAN PABLO GARCÍA |

this tool has not become widespread, so the DNP will propose market mechanisms that encourage its use and bring innovative ventures closer to additional sources of financing.

Bibliography 1 Arango, C., Arias, F., Rodríguez, N., Suárez, N., & Zárate, H. 2020. Efectivo y pagos electrónicos. ESPE Ensayos sobre Política Económica, 93.

In summary, the country has made great strides in financial inclusion as a result of sound public policies and an industry that seeks to be in tune with the needs of its customers. However, we must maintain the progress made in the dimensions of access and use, and gain ground in the dimensions of quality of financial services and well-being that clients derive from them.

2 Banca de las Oportunidades. 2020. Reporte anual

Document CONPES 4005 responds to these needs by committing the coordinated action of 22 public entities of the national order over a 10-year horizon and with a value close to $ 14,000 million. From the DNP we will coordinate the creation of alliances that allow us to achieve the vision of a country where financial services efficiently connect people and companies to the formal economic circuit, promoting the productivity and innovation necessary for growth and the reduction of inequality.

6 DNP. 2019. Bases del Plan Nacional de Desarrollo

de inclusión financiera 2019. 3 Banca de las Oportunidades y DNP. 2020. Reporte de inclusión financiera. Primer semestre 2020. 4 Banco de la República. 2020. Reporte de sistemas de pago 2020. 5 Berg, T., Burg, V., Gombović, A., & Puri, M. 2018. On the Rise of FinTechs - Credit Scoring using Digital Footprints. NBER Working Paper Series, 24551.

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2018-2022. Pacto por Colombia, pacto por la equidad. 7 DNP. 2020. Política Nacional de Inclusión y Educación Económica y Financiera. Documento CONPES 4005. 8 DNP. 2020. Política Nacional de Emprendimiento. Documento CONPES 4011. 9 Levine, R. 2004. Finance and Growth: Theory and Evidence. NBER Working Paper Series, 10766.

FINTECH AND INSURTECH: EXPLORING NEW HORIZONS

SANTIAGO BOTERO JARAMILLO

Who would have imagined that the fintech industry in Colombia, still in its early stages and unknown by many in the country, would become in 2020, according to the latest edition of Fintech Radar, the third largest Latin American ecosystem in development of digital technologies? Notwithstanding the pandemic and its profound economic and social implications, the growth of the sector was not affected. Quite the opposite. Last year the fintech industry in our country grew 45%, as indicated in the report “Fintech in Latin America: growth and consolidation” by the InterAmerican Development Bank and Finnovista. This is no small feat, for it was in this same year that the country’s economy experienced one of the largest declines in its history (6.8% according to DANE). This achievement is certainly the product of long years of work, innovation, disruption, creativity and perseverance on the part of those who

CEO FINSOCIAL

make up this industry. However, the work of those of us at the forefront of these types of companies should not stop here. Entrepreneurs in the fintech sector must relentlessly explore new horizons, permanently promoting those emerging businesses that have the potential to break through this vast field of innovation.

INSURTECH, THE FINTECH COMPANIES OF THE INSURANCE SECTOR Perhaps I am not wrong in stating that many of us have had to endure tedious and cumbersome processes when obtaining insurance in Colombia. I recently found myself in the need to acquire three policies: one for my apartment, one for the pet that I just bought for my son, and lastly, life insurance. Well, I can attest that I

SANTIAGO BOTERO |

had to fill out at least 10 different forms, several of them requesting the same information, in addition to filling out, signing and fingerprinting (with black ink, as in the old days!) countless other documents to then scan and send them physically and digitally to my insurance broker. All this after having waited several days for the different quotes that I was finally able to evaluate. In total, I dedicated at least 6 hours to this tedious and irritating process. Not to mention that I had to go to three different payment platforms, none of which were particularly customer friendly, to be able to pay for the aforementioned policies. In short: it was torture. Certainly, everything would have been easier if

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a digital platform had allowed me to enter my basic personal data (something that would take me 10 minutes) and, using liveness technology, would have checked and verified my identity, and thus, from multiple databases available in the cloud, compiled and transmitted to the insurers all the pertinent information for each of the three policies. The payment could also have been made digitally with a single transaction. Will this eventually be possible? On the other hand, could you imagine the possibility of insuring (for example against robbery or accident) a taxi ride, a night out, or a Transmilenio trip?

the country to be within the reach of a click, from anywhere in the world and with a friendly customer experience.

INSURTECH: A NEW PATH

Furthermore, imagine the optimization and efficiency an Airbnb operator would achieve if it could insure each property only during the days when it was occupied by users of said platform? What I want to highlight is the prevailing market need for unconventional, disruptive, novel and unique insurance products; policies that people, especially the new generations, will eventually come to demand but that today do not exist even in the collective imagination. Well, that dream is possible and it will be a reality very soon in our country. And it will be possible thanks to insurtech companies, the fintech companies of the insurance sector. These companies are loaded with innovative digital solutions and have all the potential to completely revolutionize the insurance sector in Colombia. Naturally, insurtech companies use technologies already found in the fintech industry such as: blockchain, data analytics, API ecosystems, digital identity, regtech processes, among others. Therefore, the insurance sector has the opportunity to take full advantage of these technologies and generate synergies with other sectors that have already realized extremely valuable gains in their digitalization processes. Ultimately, the application of these technological tools will allow the purchase of insurance in

While this sector is still new to many, it has enormous growth potential. In fact, companies that are part of the insurtech sector in the region have already raised USD $ 125 million in venture capital, which shows that these startups are already being watched by some of the most important players in the global capital markets and that their solutions will be far-reaching. I am sure that Colombia is not going to be left behind. For example, we have the case of BeeSure, a 100% digital solution, whose value proposition is to provide, from onboarding, a customer-friendly experience; In other words, a simple, fast, intuitive customer journey, without paperwork, or complicated and irritating application processes, without the need to travel, feasible from anywhere in the world and with a quick and efficient payment platform. In conclusion, the insurtech and fintech industries hold enormous potential for our country in terms of innovation, science, investment, economic growth, competition, weakening of dominant market positions, generation of high-paying jobs, financial inclusion and societal well-being. Specifically, both industries aim at the same goal: to transform and revolutionize, for the good of the consumer, the financial and insurance sectors. This is an urgent need for the governing bodies of our country to address and develop adequate and robust regulation, yet at the same time regulation that is sensible, flexible and friendly for investment in both sectors. The process has had a successful start and our regulators understand it well, but this cannot depend in mere sandboxes of trial and error. The speed and versatility demanded by these businesses surpass any historical reference and we, the entrepreneurs leading these efforts, are already navigating at maximum speed.

SANTIAGO BOTERO |

FINANCIAL INCLUSION AND OPPORTUNITIES FOR FINTECH COMPANIES

FREDDY CASTRO

DIRECTOR BANCA DE LAS OPORTUNIDADES (@FREDDYKASTRO)

Perhaps due to contemporary concerns, we spend little time understanding the speed with which the world is advancing. Today we take for granted that WhatsApp is part (and has been part) of our lives, that virtual conferences are normal and that the mobile phone is our tool to get out of trouble. The truth twenty years ago it was impossible to imagine this change and the speed of it. Financial services have not been immune to this transformation. That is why more and more

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people access savings, credit, insurance or transactional alternatives from a mobile device. In 2005, less than twenty years ago, only 50% of Colombian adults had a deposit or credit product in the financial system. In other words, it was, as some still call it, banked. In the same year, 30% of the municipalities did not have financial coverage. In other words, in three out of ten municipalities there was neither an office nor a bank correspondent. Now we know that in 2020 more than 87% of Colombians accessed

a deposit or credit product, and that since 2015 all municipalities in the geography have at least one bank correspondent. To put this contribution into perspective, when the Bank of London, Mexico and South America, the country’s first bank, was created in 1865, the Law established that it should have offices in the nine sovereign states that the United States of Colombia then had. It took 140 years for only 50% of adults to access the financial system and a century and a half for all municipalities to benefit from physical care points from a financial institution. And it is that the transformation of recent years has made, invoking the reflection on the experience of modernity by Marshall Bermann, that everything solid vanishes into thin air. Since 1975 we have ATMs; dataphones since 1984; banking correspondents since 2006; Secure Online Payments Button (PSE) since 2008; Savings Accounts of Simplified Procedure since 2009; in 2014 a Law that gave life to the Specialized Electronic Deposit and Payment Societies (SEDPE); in 2018 the regulatory sandbox arrived; and in this list I still leave out several important advances. Everything to say and ratify, that the speed of change makes everything solid disappear into thin air and that every day we find ourselves in front of a financial consumer who demands more digital services, simple and tailored to their needs.

WHAT THE PANDEMIC LEAVES US The foregoing shows that we are facing a great opportunity for Fintech companies to continue colonizing an increasingly digital customer, especially after the start of the pandemic. In fact, since 2016 the National Consulting Center has been developing an index that measures the digital appropriation of Colombians. In an indicator that ranges between zero and one, with segmentation between non-digital users, those of basic level (communication and entertainment), intermediate (education and entertainment) and advanced (transactions), it was found that between 2016 and February of 2020 the measurement went from 0.20 to 0.23, but in November of the last year it reached 0.39. In other words, it grew almost double in less than a year. Although financial inclusion is a concept that transcends mere access to deposit products and includes components of use, quality and wellbeing, the country took a leap (mainly digital) in 2020. While in 2019 1.1 million Colombian adults accessed the financial system for the first time, in the first nine months of 2020 2.2 million did the same. Now, this good result is not enough to sing victory because only 73% of Colombians have an active deposit product or current credit and it is known that a significant percentage of

FREDDY CASTRO |

those who used their account at least once in recent months, did so. They did to withdraw cash in a box, but they did not fully use transactional, credit, savings or insurance alternatives offered by financial and non-financial entities.

The second opportunity invites us to broaden alliances with entities specialized in microcredit. Only one in three microfinance institutions indicated, in 2018, that their technological and financial innovation strategy was supported by a Fintech.

OPPORTUNITIES ON THE RADAR So far there are elements that must be considered when redefining a strategy that allows more Colombians to access and use deposit, credit, insurance and transactional alternatives. However, I would like to emphasize a couple of findings from the Fintech Survey, developed by the Financial Superintendency in 2018. The first of them is that Fintech companies would be mainly focused on serving the population that is already financially included. Two out of every three clients had previously accessed these services. At this point, it is worth noting that cost reduction is not the only way to reach excluded segments, which is why we must continue to think about the development of strategies that allow reaching more microentrepreneurs and closing gaps between urban and rural areas. gender, and by income level.

Source: Encuesta Fintech (2018). Superintendencia Financiera

FINAL THOUGHTS Undoubtedly this process, which has been accompanied by the entities that implement the financial inclusion policy, will allow us in the very near future to reach new levels and measurements of the use of financial services in an increasingly digital environment. That is precisely what financial inclusion is all about.

Source: Encuesta Fintech (2018). Superintendencia Financiera

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Perhaps as connectivity and digital appropriation advance, the focus of these services, which are migrating to be more technological than financial, will not go through offices, dataphones or bank correspondents. That could be the subject of a history class. As we get there, the actors in this ecosystem will continue to show us that everything solid melts into thin air.

THE CHALLENGES OF THE PROPTECH REVOLUTION

ANDRÉS LEAL PROPTECH ENTREPRENEUR, CEO TRIARII AND FOUNDER AND EX MANAGING DIRECTOR OF PROPTECH COLOMBIA ASSOCIATION

The Real Estate industry in the world is one of the most important sectors of the global economy with very relevant actors such as real estate funds, builders, developers, retail and industry, along with asset operators and banking. However, it is one of the least digitized industries with little investment in innovation and technology for the customer. The good news is that we are beginning one of the most important transformations in the real estate and construction industry: the Proptech revolution that has already begun to transform the entire value chain of the real estate and financing activity.

What is Proptech? It is an acronym of two words, (Property & Technology) and it is the innovative use of technology to make real estate services and products more efficient through new business models. Just as other industries have made the leap towards innovation such as the transportation sector with Uber, Nubank in the financial sector, now it is the turn of real estate. Although Proptech is not entirely new, since companies such as Airbnb, Quinto Andar and Autodesk, among others, have been part of this digital disruption for several years now.

ANDRÉS LEAL |

From smart platforms there are solutions to build, buy, rent, sell, as well as solutions to improve the consumption of resources in buildings, robots in construction projects, real estate algorithms, data exchange for property management, sensors in cities, platforms of financing or drones. These are some of the technological solutions that a digital ecosystem has developed in this sector in Colombia. In this way, the digital evolution in a sector that lags behind in terms of innovation and digitization is today led by Proptech companies with market potential not only in Colombia but also in the region, which in turn, have as their main purpose to make it easier to life of users in the development of the value chain. Although it is clear that technology brings benefits for the industry and users, there are still

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enormous challenges for this to happen in one of the most traditional sectors and with complex problems in the coming years if the necessary investments are not made so as not to be left behind. A recent KPMG Global PropTech survey found that “86% of the industry sees digital and technological innovation as an opportunity,” so are we going to seize it?

CHALLENGES Next, the challenges that the real estate and construction industry has to develop the Proptech ecosystem in Colombia:

The

first challenge is the mindset, the development of digital and data culture by the industry. Innovating is risky, but companies that don’t innovate disappear. This will

prevent Proptech companies from developing and growing in Colombia. For this reason, the industry will continue to lose competitiveness, growth and improve its productivity rates. This will generate a migration of entrepreneurs and innovation to other markets with more open entry of digital solutions in this sector and of venture capital.

Similarly,

the lack of regulation that allows the development of Proptech businesses generates uncertainty for entrepreneurs and users. Some Proptech segments need regulation that transmits security to users on digital channels. Hence the importance of the suitability of companies in the management and protection of data to achieve satisfaction of customer interests and the elimination of conflicts of interest that promote the development of digital businesses. Certain regulatory issues that impact some segments of the Proptech are: Data protection and privacy, customer knowledge, digitization of property purchase / sale / rental contracts, housing user protection, among others.

Finally, the main challenge for the Real Estate

and Proptech industry will be digital talent, training the next generation of professionals. Automation is imminent, and these new companies need different profiles and skills that will be required by the industry. For example, Singapore-based real estate developer CapitaLand plans to invest nearly $ 3.6 million to enhance the skills of its workforce in areas such as data analytics, blockchain, and cybersecurity.

SOLUTIONS AND COMMITMENTS This is a panorama of challenges that the real estate and traditional digital industry is facing, which is why the importance of working collaboratively between all the actors that participate, regulate and develop the Proptech sector in Colombia, always seeking that the ecosystem generates trust in the users.

Under this idea of collaboration and digital inclusion, the consolidation of the Proptech ecosystem in Colombia will be the basis for growth and consolidation with important advances in regulatory matters, as the Financial Superintendence of Colombia has been developing in areas such as crowdfunding with resolution number 0091 of 2021, the Ministry of Housing with the notarial digitization project, allows the development of the innovation of new Proptech, which as has been happening until today, was also the purpose of creating Colombia Proptech as the most important technology hub in Latin America in the Real Estate and construction industry. We should be proud that the Colombian Proptech ecosystem is already on the global industry map today: we were nominated for the best Proptech association in New York competing against the United Kingdom, Japan and the Netherlands. This is a reflection of the work promoted by the sector that integrates Digital Marketplaces for the purchase, sale and rental of housing, Digital Platforms for suppliers of the construction sector, Mortgage Credits, Real Estate Crowdfunding, Smart Buildings, Sensors in Smart Cities, Internet of Things, Blockchain and Asset Tokenization, Digital Twins for the development of construction and infrastructure projects, Facility Management, Big Data and Artificial Intelligence, as some of the technologies that are already digitizing the entire industry. Based on the foregoing, Colombia should continue to advance in the development of legal frameworks that influence the development of technologies, increasing incentives and including appropriate liability rules to integrate these new service and product providers. For this reason, it is important to highlight that the ecosystem continues its maturation process, working hand in hand with other unions, academia, builders, government and new Proptech startups that consolidate the country as one of the best in the race for Proptech innovation. the region.

ANDRÉS LEAL |

CROWDFUNDING REAL ESTATE INTERVIEW WITH: GERMÁN JARAMILLO

What is the definition of real estate crowdfunding in a sentence? “Real estate crowdfunding is a collaborative economy applied to financial services for invest in real estate. It is the economy of good common.”

How does crowdfunding and real estate coincide? It is widely known that the real estate industry It’s one of the largest in the world, also, investment in real estate assets is considered a solid and stable investment and the cost effectiveness that generates in medium and long term is normally higher than expected with instruments traditional debt and equity.

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FOUNDER & CEO INVERTI

However, the entry barriers to investing are usually high, this is where the importance of crowdfunding lies, it makes more accessible investment in real estate assets, allowing that more people can benefit from the returns of financial investment in real estate, resulting in democratization of real estate investments. Real estate crowdfunding platforms connect investors with opportunities for real estate investment with small tickets, also opening the way to diversification. In addition to the access that these platforms bring they also usually offer analysis, monitoring and forecasting tools, which allow new investors to understand the opportunities and associated risks of the investment.

In the same way, the benefits of access to financing for real estate developers range from a quick obtain a financing alternative or complementary to the construction credit granted by the banks to a greater visibility and promotion of their Projects.

Tell us about the regulation that gave origin to crowdfunding in Colombia and the characteristics that a fintech which is that is dedicated to this activity must have? Crowdfunding or collaborative financing is a financial activity, is defined by the Decree 1357 of 2018 as the one developed by entities authorized by the Superintendency Financiera de Colombia (hereinafter, SFC) through technological platforms that put in contact with a plural number of contributors with receivers, to raise resources with destination to a real estate project. This financing activity is carried out by mean of “representative financing values collaborative ”, can only be carried out by the Stock Market and by public limited companies full-time, supervised by the SFC, sign up in the National Registry of Agents of the Stock Market (RNAMV), file for approval of the investment regulations before the SFC, among other obligations that entities financial institutions must comply, including complying with all the requirements established in the statute Organic Financial.

Taking into account the above, at the moment, how many entities develop crowdfunding activity in Colombia? Currently, there is only one authorized by the Financial Superintendency of Colombia to develop the financial activity of crowdfunding, it isa2censo the platform of the Stock Market of Colombia. In the other hand, Inverti received authorization from the SFC to become aFinancing Company Collaborative in February 2021y and once it meets the requirements it will be certified for operation and will start operation.

How does decree 1235 of 2020 impact to crowdfunding? Although crowdfunding in Colombia emerged with decree 1357 of 2018 the impulse to this type of models was given by decree 1235 of 2020; the impact that this decree has generated with modifications it has is to achieve an expansion of issuers of securities, in the understanding that crowdfunding allows companies carry out an issuance of representative securities of collaborative financing alternative to the market public securities. We managed to go from being able to finance a maximum of $ 9,000 million pesos, maximum established by the Decree 1357 of 2018, to be able to finance about $ 50,000 million pesos per real estate project; this equates to multiplying by more than 5.5 times the financing capacity per project. With the incorporation of these new rules turn up what I have called the “Crowdfunding 2.0” that is makes it a real alternative financing option for companies and on a locomotive that as a complement to the Colombian financial sector it is going to mark the economic reactivation. In Colombia, crowdfunding platforms must operate through a Society of Collaborative Financing (Sofico) or the stock exchange company of Colombia. All entities must have an authorization from the Financial Superintendency of Colombia (SFC), which generates security and tranquility for investors.

Now, having clear the regulation and the type of companies that can develop the financial activity of crowdfunding, explain us what is real estate crowdfunding? Crowdfunding comes from two words which are: “crowd” a group of people and “funding” financing, Colombian law called it “collaborative financing” which is nothing other than a collaborative economy model for which a group of people provide the capital to finance a determined real estate project, in summary, it is investment in real estate.

GERMÁN JARAMILLO |

Real estate crowdfunding is an investment option so that people can allocate small amounts of their capital to real estate projects allowing them to approach to the real estate market. One of the advantages of crowdfunding platforms is that it allows finance real estate projects among several investors, thus facilitating access to invest in real estate with small amounts, opening the real estate market that until now was intended for only a small number of investors capable of contributing large sums individually. Thanks to factors such as the valorization and the good return of the investment for people who previously did not have access; with this financing model Anyone can invest in real estate from figures around one million pesos in an easy, fast and safe way through of a technological platform that allows less than 10 clicks, do the registration process, making it easier to link investors’ money to the best real estate projects. This new way of investing in real estate, “democratizes” investments by offering new alternatives to investors with low amounts and allowing them access the real estate asset

38 | FINTECH COMPANIES IN COLOMBIA ΙΙ

market that historically has been reserved for large capitals.

Synthesize the above in a sentence “Real estate crowdfunding allows investments in real estate from low amounts, through a technological platform supervised by the SFC_, in a safe, easy and fast way. “

In the market there are other options of investment in real estate such as fiduciary rights known as Fidis and the Fic’s: Collective Investment Funds; ¿What are they about? ¿how do they work? In fiduciary rights the most common is that investors are linked through an adhesion contract and the collection of money is made through a trust company, in many cases there is no independent third part doing a specific analysis of the project and normally there is

no predetermined term or period of time and generally the investment is tied to the result of the project. With the Fidis there is a well-known case of an emblematic tower located in Bogotá, a project that It is not finished still and after about 4 years of arrears has about 3 more years be completed. The collective investment funds (FIC’s): collect investors’ money to add a significant amount of resources and invest them in real estate assets that are normally already built, to put them for rent or rent and deliver the returns that are achieved for this concept to investors, prior discount of commissions and administration services of the fund and the maintenance of assets. In this case, there is a concentration of investment by some FIC’s in commercial premises and offices that are affected by the high vacancy that occurs currently in this type of property; the investment made for this type of product is tied, in some cases to profitability and / or valuation of assets. Additionally in some cases have entry barriers due to the minimum amounts required and the lengths investment terms.

What are the most important differences between the Fidis or fiduciary rights and Fic’s with real estate crowdfunding? Crowdfunding allows the society of collaborative financing act independently, carry out a search process, analysis, selection and publication of projects real estate, with objectivity and procedures established, being entities supervised by the SFC; this puts to the considerationof investors projects with very good features considering different aspects to make a due diligence, filtering and selection of the best real estate projects. Regarding the collection of money from the investors, this is done through a autonomous patrimony that guarantees segregation equity of investors’ resources, where their money has only two options: returns to the investor’s origin

account or moves to the real estate project trust. With crowdfunding you have different guarantees, in addition to the above, if the term is prolonged, moratorium interest is generated, the money of the investor is always producing cost effectiveness.

I have heard you in other occasions refer with great enthusiasm about Financial Equity, tell us about this. And how does crowdfunding contribute to this? The financial equity of Colombians is what that I am passionate about and that is the reason why I get up every morning to give a thousand for hundred. There is a lot of talk about gender equality, social equity, equity between Colombia urban and rural population, tax equity but very little about “Financial Equity”, which is a broader definition of inclusion and deepening financial, with the arrival of the platforms from real estate Crowdfunding to the market, accelerates the path of financial equity for Colombians, both for investors and for real estate developers.

GERMÁN JARAMILLO |

CONSENSUS,

TRUST, AND CONSERVATION: THE UNIQUENESS OF BITCOIN

ALEJANDRO BELTRÁN COFOUNDER AND COUNTRY MANAGER BUDA.COM

Hello, My name is TCP / IP, but I´m popularly known as the Internet. Many solutions have been developed around me for humanity benefits. For example, now you can communicate immediately through written messages; you can send information safely, easily and quickly; you can market products through me and you can even make jokes and give your opinion whatever you want. In the same way that cells make up a human body and atoms make up all matter itself, everything that works on me is made up of bits. These are units of digital information that are reduced to two values, 0 and 1, and on these numbers I can develop anything you can imagine.

This is why, today, our whole life revolves around bits, and since everything that develops is based on a set of rules that I created, a unique form of money native to my environment was also designed, which is mathematically programmed, like me, but with a great singularity: This money is unique, unrepeatable and is outside of everything we knew until very few years ago. Maybe you have been hearing the term Bitcoin for years or maybe you found out a few days ago ... it may be something that catches your attention or maybe you think it is just another invention ... but something you cannot deny is that every day it is much more present in our reality, although many still do not know what this whole matter is about. And for that, I want to show you why you should understand and adopt it:

40 | FINTECH COMPANIES IN COLOMBIA ΙΙ

FIRST: WHAT IS BITCOIN? Let’s start with the basics. If I had to define what Bitcoin is, I could say that it is a form of money created on me (the Internet), but unlike the money we know today, it was designed to operate through smart devices and / or computers without physical representation, of any kind, working in a similar way to email, with the difference that it does not depend on a company or a central system that verifies the sending of money. So far you may think that you can do the same when operating from the website or mobile application of your trusted bank, but this is where the most important differences begin:

the first place, operations with Bitcoin are carried out through a network called Blockchain, which works in a decentralized way, without the control of a central institution or intermediary. This payments and transfers network is supported by the same users of the network, which use specialized equipment to guarantee its operation in exchange for receiving rewards for this work. They are the famous miners, elementary particles that function as small but numerous independent and freely accessible central banks, who do not trust and do not know each other, but who can reach a mathematically aligned consensus on the existence, condition and development of the operations and transactions arranged on the network.

This

network in which Bitcoin operates is open source, so that anyone can see the transactions carried out, which have an identification code known as Hash and you can search in specialized information browsers as if you were verifying information in Google, but with unlimited access and free. Only here you will not find private information of the users, so you will not necessarily know who sends or who receives the Bitcoins in each operation, unless you give your data to an exchange platform.

This

same network allows a person from anywhere in the world ... either from China or from the building in front of your house ... to use Bitcoin and make a transfer regardless of their nationality, credit history, profession or age. As with email, sending takes place in seconds or minutes, and funds will be available for use once the transaction is confirmed by network participants.

VALUE, SCARCITY, AND THE TRUST DILEMMA But the most important difference with the current monetary system has to do with the technology used to materialize all the aforementioned properties, which is based on strictly mathematical principles, such as mine (Internet), which guarantee equal conditions for all users. One of its most important properties is scarcity, since its creator designed a system in which money did not lose value over time, so he built a finite system of emission or creation. While the money that circulates on the streets, for example the US dollar, there are millions of millions of banknotes in circulation, with the possibility of many more being issued, Bitcoin will only have a total of 21 million units (not one more, not one less) which have not yet been issued in their entirety. Currently, only slightly more than 18,600,000 BTC are in circulation, of which new units are issued every 10 minutes. But to avoid reaching the limit in the short term, every four years the number of new bitcoins created is cut in half, making less and less available while the cryptocurrency becomes much more popular as time goes by. It could be said that this last aspect is what makes Bitcoin so special today, which is why we see that important companies in the more traditional sectors begin to invest in Bitcoin as a reserve or savings technology, but why this happens last we can see it with an example:

ALEJANDRO BELTRÁN |

In the famous movie “Charlie and the Chocolate Factory”, a boy named Charlie finds one of the only 5 golden tickets that will allow him to visit Willy Wonka’s chocolate factory, a unique opportunity among the citizens of a small city. Here, in a scene that takes place a few minutes later, Grandpa Joe, seeing that Charlie is going to sell his ticket for a few coins and with a resigned face, tells him: “Outside there is a lot of money and they print more every day, but listen to me well, there are only 5 winning tickets in the world and those are the only ones there will be. Only a fool would trade this for something as common as money. Are you stupid?

A PARADIGM CHANGE Theories have been developed about money, not laws, as in physics, so it responds only and mainly to the desire of individuals. But Bitcoin, unlike what we said before, is not subject to the wishes of a central entity or financial intermediary, nor to a forced course of use. It is mathematics at its finest, and as the physicist and mathematician Georg Cantor would say: “The essence of mathematics lies in its freedom” But when you have clear and precise rules from the beginning, Bitcoin adheres to mathematical guidelines that guarantee the proper functionallity of its protocol regardless of the situations that may arise, thus complying with the premise of the famous French physicist Henri Poincaré, who questioned the existence of errors in mathematics, with that responsibility falling on the actions of the responsible persons: “How is a mistake in mathematics possible?” And more than 10 years after its launch, bringing with it a real change in the current paradigm of the financial system and of governments, Bitcoin today is much stronger than ever, counting every day with greater support from enthusiasts,

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programmers, institutional investors and States, reaching maximum prices month by month and becoming what many describe as “The new digital gold”, with a monetary base that exceeds a trillion of dollars of the United States and that beats economies such as those of India, Russia, Canada and Brazil. As such, Bitcoin allows you to conserve the purchasing power of your assets over time, beyond the strong fluctuations in its price in the short term, something that does not happen with the traditional money that you have in your portfolio. And if you don’t believe me, ask yourself the following question: Can you today buy a product with the same amount that you paid for the same item 10 years ago?

AND IN THE END, WHAT DO YOU CHOOSE? Therefore, based on everything that I have mentioned throughout this writing, it is clear that Bitcoin represents the idea of global money, superior to the traditional one, without the need for governments or trusted third parties. But the best thing is that this digital money runs through a medium that you use every day, to which today almost all of us have access, and it is precisely through me, your Internet buddy. Therefore, remembering again the movie “Charlie and the chocolate factory”, Bitcoin would be exactly the equivalent of those 5 golden bills that were hidden all over Gengenbach ... unmatched, one of a kind, scarce and much more valuable than any another currency that exists today. And that is why I would like to close with the same words that Grandpa Joe said to Charlie when he held the golden bill:

“Only a fool would trade this for something as common as money. Are you stupid?

COLOMBIA, A CASHLESS SOCIETY?

ENRIQUE CANDANOZA

When we think in terms of modernity in our lives within a society, we think about technology, and in particular about all the technological advances we have had in the last 30 years. It is evident that if we had these advances in all aspects of human interaction, we would live in a substantially different world today. We need only see, for example, how now a days a cellphone that costs less than 1000 USD can handle so many operations in a second, compared to a similar handling capability that in 1980 would have cost tenths of millions of dollars. This advance, in terms of payment methods, has been going on in a somewhat slower pace. Credit cards 30 years ago offered a relatively safe way to pay for things and make transactions in the market. Nonetheless, manual validations made by retailers by hand, browsing endless lists once

CEO EVERTEC COLOMBIA

a customer decided to pay by card happened in a risk environment quite different from the one we live in. Today, the pandemic has been generating changes on every front of our lives. Digital transformation has impacted us socially, economically and in our work. We are certainly in a moment of change like the one we lived some ten years ago. One particular case is how to wage a battle in the world of payment methods. It is quite a popular title, but one with very slow results. It deals with how to reduce cash in our daily lives. We are experiencing a change in the cycle that the pandemic brought upon this subject. There is a wider and generally more accepted conscience about the reach and effectiveness of digital payments in all industries: retail, banking, insurance, taxes, goods and services, etc.

ENRIQUE CANDANOZA |

As a basic premise I would like to note that, in our reality, that is Colombia, cash will not disappear, but we do have an obligation as a society to reduce its use. According to a report on payment methods done by the Banco de la Republica (Colombia’s central bank) on June 2020, cash continues to be the most widely used payment method by our countries population on all regular monthly payments, comprising 88% in number and 87% in value. In other words, 4 out of every 5 Colombians prefer cash. This brings and endless list of disadvantages. For example, more informality. It allows operations in a “gray” economy, encouraging tax evasion and unsafe transactions, not counting the cost of producing and maintaining cash, amongst other disadvantages. In document 4005 by CONPES from September 2020, it is highlighted how in “Colombia most payments are done in cash , despite the costs of transportation, safety and storage. 90,3% of the total volume of payments in private individuals and 50% of that of companies are done in cash. Even clearer than the accuracy of these numbers is the fact that our country’s economy is cash based, and this fact is central in the goals of every agent of change on the subject, including the banking and financial services industry, being a high priority target. What should we do to encourage our economy to increase digital payments? Without a doubt we should look at the regularization of the fiscal dealing of the matter in a different tax environment, where we should start with a basic principle: we have to decrease the taxes in order to widen the base of tax payers. It is logical, but we should not ignore that implementing this will bring a change in paradigm. Here, we can implement an elemental principle about the necessity of changes in informal economy, and faced with this, we need to do something different. As a compliment to these measures, we need to generate changes in different fronts in order to establish an efficient cycle that includes an efficient financial services industry, with

44 | FINTECH COMPANIES IN COLOMBIA ΙΙ

customers that have a financial education that demands products and services in a competitive environment. Surely we will not arrive quite as fast as we would like to the levels of implementation we see in China, where 81% of mobile phone users make their financial transactions via their cellphones, but we can advance in having a more modern economy that can serve as the base of a more inclusive society. The goal must be ambitious. For example, it should aim to double financial transactions through digital outlets. It can and must be done. If we check the data from Banca de las Oportunidades in combination with data from Asobancaria, 85,9% of Colombians have at least one financial product that which they have used at least once in the past six months. This is a considerable and representative number that shows considerable growth, specially during 2020. Nonetheless, this same number in corporations does not surpass 60%, which tells us that 40% of companies, specially small businesses, do not have even one financial product. Please remember that over 80% of employment in Colombia comes from small and medium businesses. In other words, we are once again facing an environment that fosters informality through cash. Here in Colombia, we do not keep the consistency of our tendencies. With growing numbers in access to banking, use of cash should decrease in a similar proportion. This has not been our case, despite the efforts of the banking industry as a whole to digitalize their operations, reducing their physical infrastructure in order to increase contacts per square feet with their customers so they can compete with the tendency of 100% digital banks which are looking to enter our market with local initiatives, being owned by large multinational corporations, and with multipurpose platforms that have been present in our market for some time now offering services which are ever more integral to users, even offering financial services in order to satisfy this need in their customers. In order to set a goal, I should quote some global numbers. Only counting Venmo in the United States, there are as many active users

as the whole population of Colombia: close to 50 million people reached 160.000 million dollars in transactions in P2P and P2C payments during 2020. P2P and P2C have only recently been implemented.

An oriented variation in the reduction of cash as a payment method is the Digital Currency. We have over 60 countries working on this innovative field. China is testing it in cities such as Shenzhen, Shanghai and Beijing.

I quote these goals along with what we see in nordic countries such a Norway where the Central Bank conducted a survey and found that, during the final months of 2020, only 4% of the country’s expenditure had been done in cash. In this same survey they found that 3 out of 4 people conducted their payments with contactless means.

The implementation of this concept has been advancing with the leadership of Chinese economy. “It is about more than money” said Yaya Fanusie, member of the group of experts called Center of Economic and Financial power, and author of a recent article about Chinese currency. “It is about developing new tools for data gathering and for the use of data in order to make the Chinese economy more intelligent, and to base it on real time data”. On the other hand, it will allow the correct regulation of expenses by setting an expiration date on cash and to boost consumption in specific times in order to reduce or increase cash use as needed.

The nordic states have a common, long term goal to eliminate cash as the standard for the payment of products and services. Governments, tax authorities, banks and industry leaders consider cash ever more obsolete with each passing day. In Sweden, less than 20% of transactions are currently done using cash. There is some irony to this because Sweden, through the Stockholm Bank, became the first European state to issue banknotes in the year 1660. Everyday we have more banks, Fintechs and global companies in this field offering alternatives in the transactional market with wallets and payment channels with very innovative services. The regulator’s challenge is, without a doubt, to keep and open competition amongst a wide number of options, avoiding that a handful of players succeed in controlling the whole market. I can not overlook the development in cryptocurrency that without a doubt offer a cashless scheme. Nonetheless, adjustments are being made in surveillance systems worldwide, specially regarding money laundering, in order to adopt the use of these currencies in world economy, which actually competes with the essence of the system, since it was created as a decentralized system, in which no company or government could control it. It is evident it is presently and important option to consider in the financial industry and as a payment method. We have to wait to see its natural development and incorporation into the market in the future.

Finally, I quote some ideas by Enrique Dans in one of his articles which gathers certain concepts of Ron Kim, a New York congressman, who is promoting proposals such as the implementation on the financial scene in New York of a service called “Public Venmo” with all the positive and negative connotations that this proposal carries for his state. Kim recognizes that his idea does carry some difficulties on its implementation, but he argues that, for now, the fundamental idea is to give alternatives of change, saying “deep down, what we are trying to do on our first stage is simply to argue that payment platforms do not need to be private entities”, and he quotes a comparison in which he states that “this can be like a public road or highway. It is not necessary to pay rent in order to walk on it”. This is an open discussion, and the fundamental challenge is still the method for reducing cash in our society, As individuals, as consumers, as businesses and as governments, we are invite to take part of this challenge.

ENRIQUE CANDANOZA |

COLOMBIAN FINTECH DATA COLOMBIA FINTECH

Fintech solutions have proven to be crucial on the financial inclusion of natural people, independent workers, small business, companies and entrepreneurs. They have come to stay and revolutionize financial services. are here to stay and revolutionize financial services. The innovation of Fintech industry over exceeds the use and appropriation of technology, fintech industry is focused and oriented on its users which is something that can be observed on its ability and conviction of reaching nontraditional audiences, allowing them to offer financial products that they normally did not have access to. The fintech industry generates several alternatives for financial services for both individuals and business, which can perfectly coexist not only in a free competition ecosystem, but also of cooperation. Today there are more traditional and disruptive players that in some scenarios compete, while and in other ones are targeting to completely different audiences, and in other contexts can even generate synergies to add up

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CVN

the best capabilities of each player. The winners of this revolution are the users who have the possibility to choose among a range of options to satisfy their financial needs. Likewise, fintech is an environment which is open to innovation where everyone fits; big and small companies, national and foreign, as well as public and private, where all actors have a role and they play a specific instrument, but there is only one single melody, sometimes this melody needs to be adjusted, nothing is perfect and it´s just part of the challenges we have to face every day in order to continue promoting digital financial services as a national development engine and also as a powerful tool for financial inclusion.

The Colombian fintech industry has 322 companies classified in 9 verticals

FINTECHS BY VERTICALS

Digital credit:

By 2020, the Colombian fintech ecosystem has 322 companies that are classified into nine (9) verticals or segments as follows:

Digital payments:

1,24%

Digital credit for business, credit digital for people.

Payment gateways, digital wallets, digital correspondent digital networks, check issuing and Specialized Sociaties in Electronic Deposits - SEDPEs.

Business finance:

3,42% 3,73% 4,66% 30,43% 7,45%

Electronic billing technology providers, Systems of negotiation regarding to Factoring and Confirming, Payment services to third parties and Online portfolio management.

PFM (Personal Finance Management) & wealthtech:

9,63%

13,04% 26,40%

Education and financial planning companies, Roboadvisors and trading platforms or investments.

REGTECH:

Scoring, Digital identity and KYC, Fraud prevention, Risk management and reguatory intelligence Digital credit Digital payments Business Finances PFM & Wealthtech Regtech

Crypto & Blockchain Crowdfunding Insurtech Neobanks

The digital credit segment has got most of the players in the market with a 30% representation, followed by the digital payments segment with 26%, and in third place, we can find the finance vertical: business with 13% of participation. Following there I a description of the different verticals / segments to get a better better understanding of the different types of companies that are within this group:

Crypto & Blockchain:

Exchange platforms crypto assets. Virtual assets as a payment method (crypto payments), Securities or merchandise, Tokens (ICOs), Blockchain software ASA Service for financial services, Development Services, Smart Contracts for the financial sector.

Insurtech:

Insurance buyers, digital brokers, insurance wallet apps, collective pollicies or P2P (Person to Person).

Crowdfunding:

Crowdfunding endowment, crowdfunding of investment and equity crowdfunding.

NEOBANKS: Digital banks

COLOMBIA FINTECH |

Growth on the number of companies 330 247,5

279

316

322

2019

2020

Growth in sales of the fintech industry, was 55% between 2017 and 2019

237

165 82,5 0

2017

2018 Companies

There is a 36% general growth of the sector in terms of the number of companies between 2017 and 2020. The average increase of the number of companies between 2017 and 2019 was 15%. On the other hand, the growth in the number of companies between 2019 and 2020, was near to 2%. Although, in the year 2020 may entrepreneurship initiatives were identified as a result of the pandemic which promoted the creation of business models technology-based, many of them were not necessarily formalized in that year. A minimum of 9,308 employments are identified in the fintech ecosystem of the country.

To identify the size of the Colombian fintech industry companies, we have classified them according to what the Decree 957 of 2019 refers to, finding that 67% of the companies in the fintech industry are classified as “micro -enterprises”, 19% of companies is associated with “small business”, 8% are “medium” companies and 6% are large companies:

Micro Small Medium Big

Age / Geographic location: The youngest Companies with a minor average time of constitution are those that are in departments such as Huila, Norte de Santander and Risaralda, which have an average time that ranges between 1 and 3 years. Age / Vertical: The oldest companies are the those which are mainly clasified and in the submitted order, in the business finances, digital payments, and Regtech segments, which are between 11 and 7 years old of formal existence. Age / employee´s rank: The seniority of fintech companies in Colombia, according to the range of employees, is shown in the following graph:

SIZE AND AGE:

On the other hand, the general average of formal existence of fintech companies in Colombia is 7 years, and we could find the following characteristics among others:

19% 67%

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13,5 13 9 4,5

10 8

11-50

51-100

0 1-10

101-200

201-500

>500

From the previous graph, it can be inferred, that the average age of companies that are in a range of between 1 and 10 employees is 6 years.

LOCATION AND ORIGIN

There is an overall growth within the sector of 36%, in terms of the number of companies between years 2017 and 2020.

11% 8% 6%

19%

64%

92%

Bogotá Antioquia Valle del Cauca Others

64% of the fintech companies identified in Colombia are in Bogotá, 19% of the companies are in Antioquia, which includes Medellín and nearby municipalities. 6% of the companies are in Valle del Cauca and 11% of the companies are located in other regions of the country, within which are: Atllantic, Risaralda, Cundinamarca, Caldas, North Santander, Santander, Huila and Cesar . Although there is a concentration of development of the fintech industry in Bogotá and Antioquia, in the 2020-year new departments incorporated to the map or the ecosystem.

We also identified many entrepreneurship initiatives in intermediate cities, which surely will consolidated in 2021. The pandemic has speeded up digital transformation processes, making visualizing digital financial solutions enabling remote work and maximizing strategic alliances that were not contemplated without being present; so, this for sure will have an impact on the business development in other regions. It is also that we identified that 92% of the fintech companies that develop businesses in Colombia are local, and the remaining percentage have their origin in other countries.

National International

CLASSIFICATION ACCORDING TO ECONOMIC ACTIVITY The fintech industry in Colombia does not has a homogeneity on these codes which reflect their economic activities, according to the Uniform International Industrial Classification - UIIC, we see the opposite, companies of this sector count on their main activities which are found in 46 UIIC codes, which clearly shows the industry transversality, that cannot be seen as a niche of the financial sector but as a revolution both technological and innovational towards the user that has generated a disruption in the way of providing financial services. Within the three UIIC codes in which there is a greater number of fintechs in Colombia, are:

6201: Development activities of computer systems, planning, analysis, design, programming, testing, with 19% of companies. 6202: Consulting activities computing and computing facililties management activities with 7% of the companies. 6499: Other financial service activities except insurance and pensions n.c.p., with 13% of companies.

COLOMBIA FINTECH |

The remaining percentage of fintech companies are grouped in 43 codes with with similar shares.

EMPLOYMENT ON FINTECH SECTOR

10000

2% 2%

9308

7500 6757

5000

5659

2500

By 2020, the Colombian fintech industry reports at least 9,308 jobs, which are distributed according to the different verticals or segments, as follows:

The following graph shows the growth of employees of the fintech industry in the country between the year 2017-2020

2162

2017

2018

2019

2020

Employees

Some outstanding findings of this line of growth of employees in this sector are: The growth in the number of employees from 2019 to 2020 was about 38%. In 2020, technology-based industries were positioned and of course fintech was not an exception. There was a growing demand for digital financial services, and this probably led to the need to strengthen business capabilities with human resources to serve the market.

6% 35%

18%

On the other hand, the growth of this same indicator from 2018 to year 2019 was 19%. The greates growth in the number of employees ocurred from 2017 to 2018, with a 161% increase.

30%

FINTECH SALES: Digital credit Digital payments Business Finance PFM & Wealthtech Regtech

The following graph shows the minimum value of sales offintehc industry in the country from 2017 to 2019. It should be noticed that for the year 2020, there is still no information from the consulted sources to be able to make the respective comparison:

Crypto & Blockchain Crowdfunding Insurtech Neobanks

The three segments that generate the greatest number of jobs match to the three segments that have the biggest number of companies. Likewise, it can be observed the distribution of the percentage of companies according to employee ranges from the employment data of 2020 as it is shown on the following graphs:

$1.949.714

2000000 1500000

$1.513.079 $1.260.560

1000000 500000 0 2017

2018

2019

Incomes in millions cop

0,6 54% 0,45

0,3

32%

0,15 7%

0 1-10

11-50

51-100

4% 101-200

201-500

>500

50 | FINTECH COMPANIES IN COLOMBIA ΙΙ

The average growth in sales of the Fintech sector in the country between 2017 and 2019 was 24%. There is no doubt that the information on the income of the year 2020 will show the growth of the sector under the pandemic scenario according to the outstanding increase in the demand for digital financial solutions. Sources: Superintendencia de sociedades, Superintendencia Financiera, Colombia Fintech, RUES – Registro único empresarial y social.

REDEFINING AND EMPOWERING AN INDUSTRY: THE FINTECH ARRIVED TO STAY

CAMILA SALAMANCA

EXECUTIVE DIRECTOR ENDEAVOR

It´s very gratifying to see today the progress that has been made with the emergence of different mechanisms and options to provide access to financial services in an efficient, agile, and inclusive way, thus solving some of the challenges that we saw years ago related to low banking. in the Colombian market and the different obstacles to access to financing for companies. It is clear that there is still an important road to travel, but it is also clear that there are a large number of initiatives in Colombia today that aim to advance in this regard and to contribute and work hand in hand with the different private and state entities to achieve it.

Only within the Endeavor group of companies do we see the emergence of companies that seek to contribute to boosting the financial sector in Colombia from different fronts, among others:

Giving access to financing mechanisms for different segments of the economy: In one way, facilitating options for consumers, individuals and businesses. For example, through the options provided by Referencia in terms of point-of-sale financing for businesses, agile financing schemes for students, and for working capital for freelancers, micro-entrepreneurs and

CAMILA SALAMANCA |

specialists. Or, the possibility that Addi offers to obtain consumer loans with competitive rates to finance purchases through commercial partners, as well as payroll and free investment loans for teachers and pensioners of the public sector by Finsocial.

to make recharges, national drafts, remittances, payment of bills, subsidies, correspondent banking and SOAT, among others, in addition to enabling small businesses to receive debit and credit cards through PuntoPay.

Lineru, Zinobe’s featured product, allows people who do not have a credit history or have a negative report in credit bureaus to access credit and create a credit history. Not surprisingly, thanks to its relevant inclusion work, Zinobe was authorized this year by the National Government to provide loans to independent workers in the context of the crisis.

Facilitating company operations through efficient instruments

In another way, we also see today, more and more companies looking to give small companies access to liquidity or working capital. Mesfix, for example, through its crowdfactoring platform allows SMEs in Colombia to obtain liquidity while generating an investment option for the Colombian population. Other companies with whom we have worked in some Endeavor programs such as Sempli and Finaktiva also grant loans to small and medium-sized companies. In addition, we see how financing options are being developed for the agricultural sector such as Agricapital.

Giving access to financial instruments that make it possible to bring the population and companies closer to a greater banking “sophistication”: Another important event is the interest of many of these entrepreneurs to democratize financial services and offer innovative solutions that facilitate transactions, adjusting to what exists in the market. For example, Bold allows small and medium merchants to have a dataphone and a payment link in their business in a few minutes and without major processes. In Grupo R5, natural persons can buy their SOAT with a discount and in five minutes and request a loan with a vehicle guarantee. Puntored, helps to promote the growth of independent businesses and businesses by providing financial services through innovative applications that allow them

52 | FINTECH COMPANIES IN COLOMBIA ΙΙ

In addition to increasing inclusion and access to instruments and financing, Fintech companies also came to make life easier for users and companies. This is how Tpaga offers companies the option to make their digital dispersion and thus make disbursements and the payment of payroll services to their employees and collaborators through the Tpaga Wallet. Or administrative, accounting and billing software such as Siigo and Alegra allow, in different niches, small and medium-sized companies to make their processes more efficient. Although we are still in the country far from reaching the levels of banking, sophistication and financial efficiency that we would like, it is very pleasant to see how this important emergence of mechanisms has occurred that seek to solve existing challenges and bring companies and people closer to each other financial instruments and services in an agile, efficient and inclusive way. I am convinced that these are just some of the ventures that we will see emerge in this area and that will allow Colombia to continue advancing on this front. The opportunities presented by technology for the financial sector are significant. Although we do not know for sure the final outcome of all these initiatives, what we do know is that, beyond a simple trend, Fintech companies are contributing to the Colombian economy and financial system in a structural way, and they came to allow a greater scope and democratization of these services, and above all, achieve mechanisms that allow less informality in the transactions that take place day by day in the economy, which is crucial importance for the country.

FINTECH AS A SERVICE:

A NEW ROUTE TO ENHANCE DIGITAL FINANCIAL INCLUSION ANDRÉS ALBÁN

Banking as a Service is a term that has become popular in recent years. It refers to the possibility for financial institutions to “rent” some of their assets (information, technology, infrastructure, licenses, data, etc.) for third parties to use as part of their value offering. As can be imagined, many financial institutions do not like this model because they can, in a way, cannibalize their own products with more competition. However, in an increasingly

CEO PUNTORED

interconnected world with diverse user needs, these alliances are more common and important than we imagine.We find cases such as Puntored that uses connections with banks to offer money transfer services, or to go no further, a popular digital wallet in Colombia that, through an alliance with Davivienda, complements its capabilities by providing financial services to its users (e.g. issuing a Debit Card with its own brand). To better understand the types of services that

ANDRÉS ALBÁN |

are commonly presented in Banking as a Service, it´s useful to group them into the following categories: Financial Data of individuals and companies: promoted by Open Banking (a regulatory change that facilitates the opening of banking information), in which financial institutions allow third parties to access customer data from banks or other financial institutions. Developing services around this data, such as Identity Validation or Credit Scoring, is a form of Open Banking. Money Transfers: Once banks allow access to Data from their customers’ accounts, the next step is to allow changes in such information. In other words, to make debit and credit movements in the accounts. This transaction can be used to develop services such as immediate transfers or to facilitate instant disbursements from Digital Credit companies, directly into the customer’s bank account. Debit or Credit Infrastructure: is understood as the facility provided by a bank for a third party to act as a provider of a financial service, using the entity’s license of capture or issuance. An example of this is a company that issues debit cards or Puntopay, a Merchant Aggregator that operates under Davivienda’s acquiring licenses. Open Banking and Banking as a Service create a more dynamic and inclusive financial sector that would allow our country to advance in key public policy issues such as: the formalization of small commerce, the elimination of cash and greater rural inclusion to financial services. This would result in greater growth and tax collection from a larger base of users. These objectives, now more than ever, are key to post-pandemic recovery. However, we currently have major barriers that prevent banks and other financial institutions from decisively approaching these business models. The first obstacle has to do with technology. The challenge of migrating from Legacy Systems, as are most of the Core Banking in our country, which do not allow to easily develop communication

54 | FINTECH COMPANIES IN COLOMBIA ΙΙ

protocols with third parties known as APIs. Entities have enough technological challenges with the evolution of their own products to dedicate time to connect with third parties. This is the main barrier for some services, such as enabling immediate transfers. Another type of barrier derives from the lack of clarity in regulation or adequate market conditions that guarantee banks’ bets to work in alliance with Fintechs. Innovation is usually a few steps ahead of regulation, and making decisions without a clear picture is difficult for a regulated industry such as finance. In 2020 the Colombian government had milestones closing the gap between regulation and market opportunities. However, this must be accompanied by the timely issuance of decrees that deepen some aspects of the relationship between banks and third parties. At present, and simultaneously with the writing of this article, key efforts are being articulated to enable Open Banking in Colombia, generating a framework of understanding to a large part of these relationships with third parties. Finally, there are barriers derived from market conditions that do not encourage competition. To avoid this, the government must ensure that the financial services market is not influenced by laws that generate regulatory or fiscal arbitrage in favor of a specific business model. This arbitration is especially dangerous when it rewards closed ecosystems that do not encourage competition, since in the end the main loser due to cost overruns or lack of access is the ordinary consumer. In the world exists several examples of closed ecosystems that end up concentrating a disproportionate amount of power in a few players. A clear example is the closed QR payment model in China, which grew exponentially due to embedded costs that made it impossible for others to compete. This situation ended up excessively concentrating the business in players such as AliPay, which generated concern in the governments of both hemispheres, to the point of stopping one of the most talked-about IPOs in history and accelerated an abrupt intervention by the Chinese government, the outcome of which is still unknown.

Integration of multiple financial, non-financial, data and infrastructure services.

An entity offers its own services,

Bank 3

Bank 2

limiting itself to its capabilities

Bill Payments

Bank 1

Instant transactions

Sedpe

Deposit

BANK

Financial Co.

Services

• Data • Own products • Electronic deposit

Apps

Retailers

Fintechs

• Telcos • Insurance • Content • E commerce

Other valueadded services

Wallets

Apps

Retailers

Fintechs

Wallets

USERS USERS This illustration exemplifies the difference between the services of Puntored, a Fintech as a Service, and the approach of Banking as a Service from financial institutions.

Not to go so far away, another example is Colombia. One of the countries in the region with less acceptance of low value digital payments: several studies suggest that this is due to the very high costs for merchants derived mainly from withholding taxes and the 4x1000. In Colombia, very few financial institutions have managed to overcome these barriers. Some have the economic or political commitment, but do not have the technology, and vice versa. That is why we are seeing how some Fintechs, which have developed interconnection capabilities with financial institutions over the years, are becoming great allies of financial institutions and third parties that are interested in developing joint models but lack technological competencies or find it difficult to achieve scalable business models. These types of services could be called Fintech as a Service; companies that help banks enter the world of products as a service.

services from other sectors such as insurance, telecommunications, content, among other added values, such as loyalty programs and benefit plans. They also allow the aggregation of data from various sectors, combining financial information with relevant data on customer consumption in the real sector. This illustration exemplifies the difference between the services of Puntored, a Fintech as a Service, and the Banking as a Service approach from financial institutions. Thus, Fintech as a Service will become a “One Stop Shop” for many of the entities that need to launch a digital wallet. Retailers, gymnasium chains, mass consumption companies or public service providers seeking to bring their users Financial Services embedded in their Apps to complement their core services, while financial institutions will place their capabilities at the service of customers that otherwise would be difficult to reach.

These Fintechs, which are not limited to one or more financial services, offer the ability to add

ANDRÉS ALBÁN |

FINTECHS ARE HERE TO STAY

- WHICH IS GREAT NEWS! NUNO LOPES ALVES

SENIOR VICEPRESIDENT ANDEAN REGION VISA

Talking about fintechs in Colombia still seems like a topic to be discovered, but the truth is that they have been with us for a long time and their origins are very diverse in the country. We have seen from a startup that began with the digitization of homes deliveries, such as Rappi, challenging models that were born within traditional financial groups, such as Nequi, Dale or Daviplata. Even players who at their birth proposed to play as “the bank-not bank”, as Nubank for example. What unites them all is what they propose to do: differentiated experiences, disruptive business

56 | FINTECH COMPANIES IN COLOMBIA ΙΙ

models and use of technology at a level that has perhaps never been seen in the financial sector. And furthermore, not only with the purpose of improving the financial offer, but also expanding it to segments with little penetration, either “unbanked” or even “underbanked”, which are those that have banking products, but give them little use. Sounds good? Of course! If it sounds good it is because it is good. What it does is energize the industry with innovative solutions, both in traditional and emerging segments, and this

translates into a more competitive and inclusive economy in Colombia. Here, the main winners are consumers, who in many cases begin to receive “more for less”, that is, more relevant solutions tailored to their needs and financial capacity, or much more specific solutions designed with more precision for their preferences. But fintechs were not always received with the same enthusiasm, at least by traditional financial institutions. From a historical perspective, the relationship between the traditional financial sector and fintech companies has evolved in the last 5 years, achieving a healthy balance between competition and cooperation. At the beginning, a large part of the fintechs emerged to compete with the banks and had a clear confrontational discourse, but today it is clear that in Latin America they have a cooperative purpose. Also, from the point of view of the financial sector, the disposition changed: many of the large Latin American banks have their open innovation programs and seek to engage with startups in general, through alliances that generate, beyond the provision of services, a positive contamination in their way of acting. And many, as we have seen, become their own fintechs.

Where should we aim then? The answer is to seek that Colombia has the conditions to continue promoting the creation and strengthening of fintechs in the country. Practical experience shows that the level of maturity of fintechs is correlated to the level of maturity of the ecosystem. In more mature systems, there is an abundance of investors for the different phases (angel, seed, series A / B / C, etc.), also accelerators and incubators, universities with cooperation programs, government support (from financing to regulation), support of companies with their open innovation programs, hubs and coworking spaces or class associations that add startups. But being an ecosystem, each actor needs to do their part or they will be thrown out of balance. Without regulations that facilitate access to new players, promote transparency, promote standards and bring legal certainty, there will be no proliferation of investors. Without companies

being prepared to open their businesses to fintechs and facilitate their integration, this potential will remain underutilized. The experience that we at Visa have had in this last point with our acceleration programs, from our position, there were two things that these fintechs valued above the rest: (i) mentoring - taking advantage of our knowledge of the industry to refine your value propositions and save a few “quick miss” cycles; (ii) connections - in their early stages, what fintechs need most is a network of contacts and relationships, and to scale, expand their user bases, and learn from that. Being able to present them to our clients, be they banks, acquirers or businesses, is even in some cases more valued than direct investment. At Visa, we see cooperation between fintechs and financial institutions as key. In this way, we seek to act, basically, as a catalyst that unites the innovative value offer that fintechs usually bring with the scalability and security of traditional institutions, in a collaborative development environment that we can facilitate (eg, our centers co-creation or Visa Developer platform). Finally, the cherry on the cake would be to make available to the ecosystem, beyond our technology and resources, everything that comes through our acquisitions, investments and strategic alliances. Part of this comes, of course, from the aforementioned acceleration or incubation programs. We are facing a panorama where technological advances move at an increasing speed and consumers are increasingly demanding for their financial experiences, seeking that they are increasingly fast, secure, reliable and innovative. Also, we have the best opportunity ever ahead to include a large sector of the economy financially and digitally, to bring the benefits of digital payments and help more individuals, businesses and the economy in general to prosper. It is time to act, integrate and collaborate.

Come more fintechs!

NUNO LOPES ALVES |

DISEÑO BY: VERNE STUDIO

Promoter of business ventures

58 | FINTECH COMPANIES IN COLOMBIA ΙΙ

COMPANIES THAT BEGIN TO SUCCEED UNDER

THE SAME INNOVATION ECOSYSTEM

Finsocial’s success story has unleashed the creation, promotion and consolidation of a surprising ecosystem of companies that revolve around this loan originator. More importantly, these companies are already conquering new customers and markets, generating their own growth dynamics.

They have been started by former Finsocial collaborators who, inspired by their entrepreneurial spirit, decided at some point to dive into the unknown as independent business venturers. As expected, they have started to succeed.

FINSOCIAL |

ECOSYSTEM OF COMPANIES INSPIRED BY FINSOCIAL

Software CSR

Banking

Employment Consulting

Insurance

Health Insurance

Insurtech

Analytics

General Services

Agroindustrial Services

Collection

Kollect Group

Master Trust

Marketing Fintech Insurance

Finanzas

Para Todos

60 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Sales

Leading the ecosystem is Red5G, a software and digital development company specializing in the design and supply of financial/banking core to entities (regulated and unregulated) of the Colombian financial sector. What makes Red 5G different is that more than just a technology provider or developer, it also offers an integrated service: design, prototype, UX/UI, front-end and back-end, SQA, infrastructure and production. The company’s next step is to expand to United States and Argentina.

Strengths of RED 5G

Cloud Services

Multi-device Functionality

Versatility and Adaptability

Easy Third-Party Integration

Alert and Notification System

High IT security

Responsive Design

Transaction Tracing

Consistent with Finsocial’s fintech nature, several companies in the ecosystem also operate in this industry. Integrity, for example, a 100% digital B2B loan originator, aims to become a regulated financial corporation before the Financial Superintendence of Colombia (SFC). Its business model consists of deeply penetrating the capillarit y of its customers and, thus, leveraging the transactional wealth embedded in the complex universe of businesses and companies under each of one of them, which conventional banks fail to fully serve.

FINSOCIAL |

Another fintech company that enhances the ecosystem is Bee, a digital insurance company, or insurtech, which will not only offer a fast, user-friendly experience free from wearisome paper work and cer tifications typical of the traditional insurance industr y, but will also structure and offer highly disruptive products

for the Colombian market. Who has not desired to have insurance (against theft or accident) on a certain journey and time of the night –and only for that journey and time of night– when riding a cab or public transport? With this example the reader can get an idea of the type of product targeted by Bee.

Web App For All Cartera

Para Todos

Hogar calle 80 No. 51 - 40

póliza # 84563745

Agencia digital de seguros

Información siniestros In

días restantes 340

Consulta pólizas

Calle 91 No 57-24

Solicita en línea X

En mora

Vence: 2021 - 12 - 09 Línea de atención: (031) 437 86657

ver cartera

No. póliza: 65748899999 No. siniestro. 35448693

Pagado P ag

2020-02-09 2 020-0

póliza p óli # 84563745

ver detalles

SOAT

Asistencia y servicios

Días restantes 340

Salud Mis pólizas

No. póliza: 65748899999 No. siniestro. 35448693

Siniestros Pagado P ag

2020-02-09 2 020-0

Calle 91 No 57-24 Asistencia y servicios

Ver Detalles

Pagado P ag

2020-02-09 2 020-0

Contáctanos

Hogar calle 80 No. 51 - 40

póliza p óli # 84563745

No. póliza: 65748899999 No. siniestro. 35448693

Cartera

Vence: 2021 - 12 - 09 Línea de atención: (031) 437 86657

En mora

ver detalles

Días restantes 340

ver detalles X

En mora

Vence: 2021 - 12 - 09 Línea de atención: (031) 437 86657

Ver Detalles

Contáctanos

Digital Insurance Company

Speaking of the insurance sector and the ties with the fintech industry, we cannot overlook Para Todos, an insurance agency that provides its services to Finsocial and that only last year, during the pandemic, placed premiums issued by the country’s insurers for a value greater than 15 billion pesos.

62 | FINTECH COMPANIES IN COLOMBIA ΙΙ

The value proposition of Para Todos consists of two pillars. First, the company has its own digital platform that enables users to monitor from any mobile device in real-time the status of their policies, claims and portfolio, as well as to consult the service lines of the insurers and make payments online. Second, Para Todos can operate with minimum costs, as it uses specialized sof tware to monitor production and commissions second by second, manage customer and policy information with absolute efficiency, issue production, portfolio and claims reports anytime and from anywhere and, of course, take automatic control of renewals.

A l s o b e l o ng ing to t h e F in s o c ia l f in te c h ecosystem we have Finanzas Para Todos, an insurance policy financial company supported by Wiipo, a new custom-made digital platform that requires financing for this type of product. The company was rcognized in the iNNpulsa Empodera program as one of the best ventures in the countr y in 2020. Thus, Finanzas Para Todos is the first Colombian startup to finance policies 100% digitally, 24 hours a day and 7 days a week.

We build Value and Trust

We cannot leave out MTKapital, a financial asset manager specializing in master trusts, which provides its ser vice to various loan originators, issuers and investors. It is the first Colombian company of its kind. In fact, 50% of its shares have just been acquired by CxC, a multinational master trust specializing in the banking, corporate and institutional sectors.

Of course, in Finsocial’s ecosystem there are also companies that operate in sectors other than finance, insurance and technology. For ins tance, at the end of 2020 Green Fed and Fair (GFF ) was founded, a business manager in the agricultural sector for the development of world- clas s brands. GFF aims to build and position brands based on quality seals, good practices, fair trade and environmental sustainability, but on a rigorous f iduciar y and corporate governance structure, in order to position, with high prices, certain products in foreign markets that have been opening up to the Colombian agricultural sector.

FINSOCIAL |

Tu Tienda en Casa (T TEC) is a company created for enterprising women willing to start their own store in their home. Using a Finsocial product called FinsoTienda, they receive the necessary supplies to start their new business (furnishings, digital tablet, initial inventory), as well as an injection of working capital for a few months.

Kollect Group There is also Verne, a communications agency specializing in corporate marketing and business branding, and Hoom, which specializes in providing general employment ser vices. Of course, Verne and Hoom provide their services to several of the companies in the ecosystem, but they also work with other types of customers, both in the public and private sectors. This can also be said of companies such as Medilínea, Human Happiness Solutions, Trudata and Kollect Group, which operate in the health insurance, employment consulting, analytics and collections industries, respectively.

64 | FINTECH COMPANIES IN COLOMBIA ΙΙ

More importantly is the detailed support in finance and entrepreneurship that they receive from the Finsocial Foundation. The idea of TTEC is to build a network of 50,000 entrepreneur women throughou t the countr y for ming a collaborative economy system based on a digital platform to sell food and basic necessities from their homes and also operate as a point of payment.

Last but not least, we have the Finsocial Foundation, a non-profit organization that develops all the CSR processes for the loan originator and several companies in the ecosystem, providing support to entrepreneurs, supporting financial education from childhood and, naturally, promoting solidarity projects and resources for the benefit of vulnerable and needy populations.

FINSOCIAL |

ecollect solves the efficiency issues that companies must Grupo empresarial deal with to correctly identify, in the shortest time possible, their customers’ payments

66 | FINTECH COMPANIES IN COLOMBIA ΙΙ

ecollect

YOUR COMPANY’S PARTNER FOR IMPROVING THE PAYMENTS COLLECTION PROCESS

Before Internet payments or electronic commerce exist, companies received payments through cashiers in banks. Then, a team of employees would invest long hours to manually reconciliate those payments with the invoices to continue with the service processes after the payments were confirmed. Today, in a digital era with a 2-digit growth in the adoption of new payment methods and collection channels, it’s a paradox that companies still need to reconciliate payments as they did 20 years ago. Operational inefficiencies exists because companies can’t trace the payments they receive, therefore have manual offline processes that increase response times, overprocessing, costs and negatively impact the customer experience.

ecollect solves these inefficiencies faced by companies of all sizes across industries needing to correctly identify in the shortest possible time the payments received from their clients.

Many payment methods worsen the reconciliation problem Before 2015, Colombia had no more than 10 consolidated payment gateway providers, however, as of 2016, the expanding technological development led to the birth of new Startups and the worldwide emergence of the concept “Fintech” gave also birth to new players that powered the local digital payments market.

ecollect |

Integral solution

ecollect is a digital product that impacts the efficiency of the companies in the region with the real concept of online payments.

Benefits

Reduction of operational costs

Increase of customer satisfaction

This market growth resulted in users having access not only to the traditional payment methods like cash, cheques, credit cards or bank transfers, but also to digital wallets, bank correspondents, electronic deposits and potentially new payment options coming in the near future. The adoption of these technologies improved the amount of payment methods available to the end user and led companies to adapt and accept this diversity of channels. However, the traditional reconciliation process is far once again to be efficient, as now companies must work in the

68 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Security and compliance

reconciliation for each payment method making this operational task much more difficult. Faced with the growing demand for new payment methods and the reconciliation challenges that companies began to face, Avisor Technologies (Bogotá, 2002), one of the Colombian pioneers in providing payment solutions, understood the need of companies to offer all the payment methods available to their clients, managing to identify online payments, with no offline processes, no reprocesses, and no extensive teams of people carrying out the reconciliations. ecollect was born as a digital product.

We have achieved operational savings by reducing the amount of resources allocated to the payments reconciliation Sofía Ortega Real Estate industry

ecollect as an integral solution

How do companies benefit from ecollect?

ecollect goes beyond being a payment processor that offers a variety of collection channels. According to Finnovista, there are 43 Fintech companies in Colombia that solve the acceptance of online payments, however, although businesses can collect through a variety of methods, they must afterwards do all kinds of crafts and operational processes to identify the origin of those payments.

Among the various benefits that ecollect offers, companies can generate operational savings by reducing the number of resources allocated to the reconciliation of payments, reducing the value chain lead times, and significantly improving the customer satisfaction.

ecollect allows its corporate clients to offer a wide network of payment channels to their payers and at the same time offer specialized solutions for customizing the collection policies within the transactional platform. Companies can collect more efficiently with the tranquility of instantly knowing all the data related to the payments.

Best of all is that this is possible through one single implementation between ecollect and the company’s systems. This implementation will allow the company to offer the actual payment methods and collection channels available plus any upcoming payment methods without the need of complex integration efforts in the future. A wide scope of payment channels allows companies to offer payers alternatives that fit their payment habits, added the possibility

ecollect |

70 | FINTECH COMPANIES IN COLOMBIA ΙΙ

of applying collection policies. This creates a more transparent approach that translates in better account receivables indicators and in the strengthening of the relationship between companies and their clients.

ecollect´s positioning ecollect offers a specialized product with the most complete features, achieving thus a higher level of integration of the payment processes with the company’s information systems. Thanks to its rapid growth, ecollect currently helps more than 400 companies with specialized solutions for industries such as education, health care, real estate, construction, finance,

manufacturing, insurance, among others, both from the public and private sectors. ecollect offers its solutions in Colombia, the Dominican Republic and Mexico, with an expansion process towards other markets to help more companies to solve efficiency problems with their payments. A sample of this growth is the recent participation in Colombia’s Ministry of Technology and Telecommunications (MinTIC) and SeedStars’ Expansion Program, where ecollect stood out for the maturity of its processes, infrastructure, value offer and business model, obtaining important recognitions by the program’s mentors and sponsors.

ecollect |

Business Lines Health

Real Estate

Construction

Finance

Manufacturing

Insurance

Education

The payments industry transformation ecollect is transforming the payments industry with a more comprehensive conception of the information systems through the collection of the different concepts that generate cash flow and that allow efficient process cycles, with a clear approach towards operational improvement and customer experience. The features offered by ecollect originate on the company’s deep knowledge of the needs of the financial, commercial and customer service departments. This ensures a digital product that

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becomes a key player that generates a real impact where it is most needed for the sustainability of the companies. This product delivers relevant information for business decision making, transforming payment information into powerful qualitative tools, allowing decision makers to identify the opportunities to modify collection policies, payment methods to offer, and to understand the payment habits and profitability of your customers.

The Team ecollect is built by an interdisciplinary team of people with deep knowledge in new technologies and a great ability to identify the customer´s needs as the main pillar to create a product. Among its skills, the team holds certifications in Agile methodologies and Design Thinking. The leadership and management team holds more than 25 years of experience in I.T. and Management in real and financial sectors, plus an interesting mix of experience and youth that enhances the best of the team. For its sustainable growth and expansion strategy the company has a systematic process that seeks

to bring the best talent with the technical skills and knowledge needed to help them embrace the corporate values that will identify them as an essential part of the brand and what it represents.

ecollect is a digital product that brings the real concept of online payments to the efficiency of companies in the region

ecollect |

One of the first payment gateways to incorporate cash Grupo empresarial payments providing financial and digital inclusion to a vast majority of the population.

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PAYVÁLIDA “CLICKING” WITH FINANCIAL INCLUSION

click!

Payvalida is one of the first payment gateways to incorporate cash payments allowing financial inclusion of a large segment of the Latin American population. Serving more than 2.700 International and Local merchant businesses, it makes it possible for unbanked consumers to take part in the digital ecosystem and enjoy the benefits of online shopping. Following Silicon Valley’s innovation practices, this startup formed in Colombia in 2011 has expanded across Latin America growing at 10x rates during the past 3 years. Excellence in operations and support, led to partnerships with key players in the digital world: from Videogaming and Entertainment platforms, to insurance companies and banks, covering most verticals in e-commerce. Buying online has enabled customers to have access to the best products and services in the global market and discover new experiences. Nowadays it seems obvious that anyone can have access to online shopping but in the past, it

was a privilege reserved only to those who were considered worthy enough to be granted credit cards by banks. This was a requirement that left millions of customers in Latin America completely out of the e-commerce world. 10 years ago, Payvalida set on a mission to remove that gap and made a bet on financial inclusion, connecting cash collection networks and domestic payment methods, with merchant businesses to serve Latin American customers. As a result, a vast majority of the unbanked population now has access and can enjoy the benefits of online shopping. To this date, cash remains as one of the favorite payment methods for Latin Americans, a region where cash is still king. “Since we started, we have been able to understand consumer payment habits and we continue giving them what they need”, explains Jorge Vélez, CEO and Co-founder of Payvalida. “The digital transformation trend

PAYVÁLIDA |

Jorge Vélez, CEO and Co-founder of Payválida

seen in recent years has allowed more Latin Americans to access products and services online, and we have been a reliable ally to grow with businesses meeting consumers where they are. As online shopping methods such as domestic debit/credit cards”.

STARTING AT HOME, LITERALLY Payvalida was born in 2011 in an apartment in Medellín, Colombia. In Jorge Vélez’s house, He and co-founder John Becerra met with the desire to create a project focused on digital democracy and financial inclusion. Both had previous industry experience where they saw first hand that a large percentage of the population was excluded from the digital world due to payment restrictions. “Access to products and services from the web should not remain as a privilege reserved to credit card-holders”, mentions Jorge. “We focused on being the solution to bring consumers closer to their favorite online products without banking services or formal affiliation to the financial system. And as it turns out, in Latin America this corresponds to the vast majority of the population”. Jorge and John were convinced that democratizing access to online commerce was a solid bet for the country’s socio-economic growth. They

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Payválida started as a dream in an apartment in Medellín, but their goals have taken them to other Latin American countries and to Silicon Valley in San Francisco. started working on the platform by bootstrapping with their own money: a payments gateway relying on thousands of cash collection physical kiosks -similar to 7 Eleven in the US- available throughout the country, where users initiated a purchase online and completed the cash payment at a kiosk nearby. This would open the door to millions of consumers in Colombia living in rural areas or neighborhoods distant from major urban areas. At the same time, it helped increase the payment transactions for Merchants selling online so it was a clear “win-win” situation. Payvalida started as a dream in an apartment in Medellín, but their perseverance has taken them to more Latin-American countries and to Silicon Valley in San Francisco, where they raised funding.

TIME TO ENTER TO THE GAME While working on the platform, the Payvalida team knocked on doors of different businesses. They quickly identified an industry that benefited from this payment model and was expected to grow exponentially within the next few years: videogames. It was the perfect opportunity to attract Latin-American gamers to international gaming portals and the monetization model was the perfect one for Payvalida to take off. This is how in 2011, two companies decided to give Payvalida a chance. The first one was the finnish Habbo, a social media platform for teenagers that at the moment had 200 million registered users. The second one was Axeso5, the largest Latin-American videogaming platform, from Argentina. “We signed a contract over email and things moved pretty quickly. Both companies wanted us to go live almost immediately, because they had already begun marketing efforts to get consumer interest ”, says Jorge. June 9th was a day for celebration: the first transaction in the Habbo platform and Payvalida’s first successful payment. “A company from Finland, so far from Colombia both in location and culture, trusted our company and our model; this made us really proud and hopeful of our company’s future”. A new beginning with many challenges for the team emerged: expanding the platform with

newly requested features, providing customer support, and maintaining a high quality bar. Initially, the Customer Service calls reached us at our own houses but it grew so fast that we couldn’t keep up; then, we quickly realized it was time to grow our product and team.

GAMERS: A DEMANDING SEGMENT The videogaming industry was a great enabler for Payvalida’s growth. As gamers discovered the ability to pay easily and securely using Payvalida, they started to demand other game sites to adopt it so they could pay using local payment methods like cash and domestic debit cards. Gamers are a young and extremely digital segment who has high expectations and payments are not the exception: “Reputation is generated in forums; if you respond on time and provide a great service, gamers post about it and rate you well, and that creates growth opportunities through wordof-mouth”, Vélez explains. At the same time, focusing on this type of consumer is challenging: if their experience is not satisfying, they will not hesitate to express it. “Young users entrust us with their money and we take this responsibility very seriously. Thanks to this segment, we have strengthened not only the user experience of our technology but also customer service through channels like chats and social networks. We feel better prepared to resolve technical and business concerns our customers face”.

PAYVÁLIDA |

GROWTH AND BIG TECH Expansion due to growing demand for similar payment requirements in Latin America followed. In Ecuador, Perú, and Costa Rica they found similar patterns and entered with an effective strategy: creating companies with local partners who have experience and knowledge of the market, while reusing the underlying core technology.

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In 2013, Payvalida attended E3 (Electronic Entertainment Expo) in Los Ángeles, an event focused on videogames and global entertainment. They were able to convince important industry actors by exposing them to the tremendous growth opportunities in Latin America when the appropriate payments strategy is used. Put simply, this was and still is,

the only way to reach all the population in order to directly impact digital and financial inclusion. Many important companies in the industry started seeing Payvalida as a strategic ally in the region. Businesses like Riot Games (creators of the popular videogame League of Legends) saw their sales grow exponentially in the four countries, something that they wouldn’t have been able to achieve otherwise.

Payvalida soon discovered that other sectors could benefit as well. The traditional payment gateways used therein only offered integration with banks and credit cards, while Payvalida provided this, in addition to cash collection agencies providing massive reach to meet consumers anywhere. The Colombian startup gained interest from Silicon Valley where they found a new partner who was inspired by a

PAYVÁLIDA |

mission to close the digital inclusion gap in Latin America. This new partner not only invested their first ever Angel round, but continues providing technical mentorship and connections in the Big Tech environment since. The team has participated in immersion programs in Silicon Valley to get first hand knowledge on best practices of leading tech companies, the world of Venture Capital, and startup scaling. This led them to identify concrete efforts to scale the business and operations, acquire great human talent, and expand their partners network.

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This working business model has attracted other Fintech companies to use Payvalida’s services into their platforms. Payvalida went from serving the e-commerce market, to supporting other payment gateways that needed solid know-how and distribution. “There are currently 15 gateways in Latin America that offer services to their clients using Payvalida as a back office for transactions covering cash, bank transfers, and credit cards”.

THE FUTURE IS INCLUSION AND COLLABORATION Following a recent rebrand, Payvalida’s new mission is to “click” with good ideas and connect people with their dreams. The accelerated growth and expansion of the company has been possible thanks to a high-performing team, rigorously selected and enriched through constant learning. The combination of human talent and the latest technology trends is what has allowed this business to grow at a rate of 10x year-over-year and what motivates its purpose to reach more countries in Latin America in the upcoming years.

John Becerra, CMO and co-founder of Payválida

SECURITY FIRST Security certifications are a critical requirement for financial and payment transactions. For the fifth consecutive year, Payvalida complied with the PCI-DSS standard, strictly adhering to secure practices that protect user’s data. The startup also follows continuous practices of “ethical hacking” with specialized partners in the Cybersecurity space. Everytime there is a change in the platform, a rigorous security check confirms that no security vulnerability is found before releasing to production. In 2020, and due in great part to the pandemic, e-commerce has forced companies to rethink their online presence and payments strategy. Payvalida’s reputation as a secure platform with robust mission-critical technology, has attracted attention from banks and companies supervised by the financial superintendence, for whom they process payments. They expect to soon add large Latin-American banks and insurance companies, thanks to the combination of differentiating value, efficient customer service, and data security.

In 2020, the pandemic brought the possibility of continuous growth, as thousands of businesses need to reinvent their online sales strategy. Payvalida has become a great ally to guide them in the process of digital transformation with agile and secure payment methods that connect them with all consumers. Ten years ago, the founders of Payvalida wanted to unleash a new world of online opportunities for Latin American consumers. Today they also do so for digital businesses in a constantly evolving journey with well established payment methods and emerging ones like QR-Codes, and Cryptocurrency.

Payvalida’s numbers:

2.700+

merchant businesses.

280K

daily average transactions.

1.000+

Gaming platforms.

PAYVÁLIDA |

We create transactional digital solutions that, through Grupo empresarial disruption and innovation, contribute to the economy development of in the country.

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SUPER PAGOS WE BELIEVE IN TECHNOLOGY

AS A POTENTIAL GROWTH FACTOR OF A COUNTRY

THE HISTORY The history of Super Pagos has been written from of tenacity, perseverance, commitment and the interest in offering transactional services thousands of people in the national territory. Around 2002, two of its partners started independently related undertakings with the telecommunications sector and the cell phone recharge sector. One of them, showing that internet calls were absolutely possible, the other, that the passion for work can make an entrepreneur with a small business in one of the architects of a company of recognition national. Around 2008, one of them created a platform Inhouse with the one that was then your company called COMRED, after having had an important experience in the world of recharges with a company of origin U.S. Seeing an opportunity in the diversification of the product portfolio,

he decided to implement in the platform something that would be more than a concept: the multiproduct. Back then, a visionary idea that time would ratify as a solution to an increasingly growing demand for services and / or products. This time, return to the world of recharging locally. In parallel, your partner has created a company called Recharge, as a result of his experience in street sales as distributor in the refilling sector. When creating your own platform, enter the sector offering the products of all operators of cell phone at that time. In the period of time that elapses between years 2013 and 2017, their companies continue to grow and see the opportunity to meet as entrepreneurs and invite other people to originate to a company that allows them to consolidate in the market and create a company that meets the talent, knowledge, clients and experience achieved in

SUPER PAGOS |

Transactional ecosystem for digitized financial inclusion Millions of transactions for both banked and non-banked users

MICROCOMMERCE

SUPPLIERS

years of work. Just the two of them decided to go ahead with the dream of growing up and create a company with projection. So the things finally came together and consolidated in a single brand that, towards 2018, they called Super Payments. The origin of the brand more than the union of knowledge, innovation, vision and passion, meant taking another step at work with a social approach, developing digital solutions for financial inclusion, contributing to the growth of the country’s micro businesses, allowing them to easily approach the transactional ecosystem in which they participate multiple actors. In 2019 the teams of both are merged companies, standing out for their training, knowledge, commitment and vision of the business. In 2020 Super Pagos enters as a company associated with Colombia Fintech, with the aim of contribute from their knowledge of ecosystems transactional and digital payments. Currently, the company is formed by more than 80 enthusiastic collaborators, with diverse training, extensive knowledge in the sector and commitment to the different communities of the country. The dream that began woven several years ago, it is represented in more than 28,000 allied micro-businesses, three strategic business units focused on B2B and B2C market, as well as

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CONSUMERS

a broad portfolio of products and alliances with entities from different sectors of the country’s economy. Always with the same common goal: strengthening of a transactional ecosystem to digitized financial inclusion.

TRANSACTIONAL ECOSYSTEM FOR FINANCIAL DIGITALIZED INCLUSION According to figures from Fenalco, year 2019, in Colombia there are about 700,000 micro businesses, of which about 260,000 are retail stores neighborhood.1 In reports prepared on the sector, estimates that about 54% of stores are are located in neighborhoods whose social status economic is low and 44% in the neighborhoods of the middle socioeconomic levels2. However, the means of payment par excellence is cash. Regarding the population of socioeconomic levels lower, about 98% prefer this means of 1 Source: Fenalco, Año 2019 2 Source: Estudio Nielsen, Aprendizajes para la adopción de medios de pago electrónicos y digitales en el canal tradicional. Banca de la Oportunidades. Junio 2020

2 years of convincing results

country's departments affiliated micro businesses

20 millions final users/year client retention rate

payment, at the highest levels, the figure decreases up to 55%. Based on this scenario, Super Pagos has focused your efforts and experience in the business transactional, in the offer of services directed to micro businesses to develop their businesses and, through cross-selling, obtain benefits that allow you to grow and retain your customers. That is why, based on strategic alliances with companies from different sectors (financial, insurance, services, telecommunications), have built a broad portfolio of services with the aim of contributing to the inclusion financial, expansion and diversification of micro shops and the positioning of the same in their communities. Based in innovation, transparency and inclusion, have evolved in recent years showing very positive results which makes them advance its goal of offering more and better financial digitization

100 millions transactions/year

Our company has focused its efforts and experience in the transactional business, in offering services aimed at micro-businesses to develop their businesses alternatives. With a great understanding of the market, are in constant knowledge of the needs of businesses and continue to strengthen their support to the sector of neighborhood stores in the country. Nowadays process more than 100 million transactions per year, impacting with their services the 32 departments of Colombia.

SUPER PAGOS |

Our Services

INSURANCE

RECHARGES AND PACKAGES SERVICE PINS BETS GAME PINS

ALTERNATIVE PAYMENTS

PAYMENT OF INVOICES

BUSINESS’ UNITS

Super Pagos is characterized by evolving constantly in transactional solutions that allow easy access to the services that offers to all its end users. With base in in-house developments, they have built the platform most reliable and robust on the market, standing out for its versatility, usability and structure of it. The platform, which in the market is known as Refácil, it can be implemented in all those establishments who wish to have products such as refills, digital products, invoice collection, banking correspondent, among others. Through the platform, we connect providers, businesses and end users. They have constructed commercial alliances with different companies from multiple sectors, thus strengthening the supply of value to the market. They have services of correspondent banking, recharges of all market operators, entertainment pins, among others. Currently they come close 30,000 microbusinesses and the goal by 2023 is to reach a

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CERTIFICATES

WALLETS

network of 130,000 allies linked, allowing access to all Super Pay services, as a commitment support on your part to the development of the economy from the country. Based on their organizational objective, they have incorporated digital payment solutions to your platform. They have jointly developed with Bancolombia, the option of payments through QR code, continuing like this, with the construction of that great transactional ecosystem that allow businesses to digitize and facilitate their daily management and operation.

2020 FIGURES Point-of-sale growth 2020

Number of transactions per month

2. We Create a free technological platform in constant development that meets the digital needs of micro commerce.the needs of the micro commerce

1. We understand We went out on the street and took on the task of understanding the needs of the micro commerce

Website to sell online:

Module to activate the online store 100% free. Receive electronic payments: debit card, credit card and transfer Home delivery model in alliance with Pibox

We are the digital bridge between large companies, small businesses and their consumers.

3. We connect we are the digital bridge between large companies, small businesses and their consumers.

Sells new products:

Recharge package to all operators Entertainment: Directv, sports betting, Netflix, spotify

5. We accompany we understand the challenges posed by digitalization, we accompany customers in the process of adaptation

Administration tool:

Bonding control tool Stock control Sales statistics for total revenue control

Invoice receipts Credits: (to start working) Certificates

“THIS IS NOT A TIME OF CHANGES, IT’S A CHANGE OF TIMES”. Super Pagos is characterized by its focus on innovation and the development of tools that allow the digitization of business processes allies. With the aim of moving forward in their purpose, they have developed the platform transactional Refácil Plus. This is a solution easy-to-use free technology. Makes possible that small and medium businesses can: sell online, diversify your portfolio and manage your business digitally. At Super Pagos they believe in closeness, familiarity and the value of the service and its mission is to contribute to the sustainability and growth of micro shops of the country. Your transactional platform is the result of an analytical exercise of the market, knowledge of the sector and study of shopkeepers’ needs.

In Superpagos they believe in an inclusive world that gives way to possibilities, a market of which everyone is a part and in which they leave exchanging roles; sometimes suppliers but always customers and when they stop right there, understand the need to remove barriers, to democratize access to transactional services and to use technology and innovation at the service of collective growth. Super Payments represents a new attitude, “we are satisfied say YES, YES to multiple options, YES to opportunities for all, YES to the transformation of looking to the future to keep moving to the rhythm from the people. We go forward: not for us, for ALL of us.”, Juan tells us Diego Osman, CEO of Super Pagos.

SUPER PAGOS |

According to a recent study, four key learnings emerge in promoting the access and use of digital means of payment: 1. Interoperability as an important condition when promoting ecosystems robust digital payment systems, allowing input and participation of various actors relevant (financial institutions and companies telecommunications). 2. Capillarity, which allows to guarantee the strengthening payment ecosystems digital. 3. Balance between cash inflows and outflows through which it is possible to reduce the use of cash. 4. The incorporation of an intelligence model business.3

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In today’s market, payment solutions that users demand are multiple. Super Payments, in line with innovation and its financial inclusion purpose, has developed a tool to facilitate the transactions of your allied businesses and end users. This tool, called Shut Down, looks for bring social sellers, commercial establishments, educational entities, residential units, among others, to digital payment systems that allow them to grow their operations by joining to the world of digital payments and solutions financial market. The kind of operation offered by this platform, incorporates link of payments, QR codes, recurring payments.

3 Aprendizajes para la adopción de medios de pago electrónicos y digitales en el canal tradicional Fundación Capital – _Banca de las Oportunidades

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Mult if

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One Onesolution, solution, multiple multipleoptions options Cha rg

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SUPER PAGOS |

Grupo empresarialAn

easy service that integrates each link in the credit chain.

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KUENTA COVERING ALL THE BASES IN THE CREDIT ECOSYSTEM

As credit and financing options diversify, the need arises to provide each business and consumer with a tailor-made solution. Today, the Colombian Fintech Kuenta integrates each link in the credit chain through a single service. Its platform is responsible for covering everything: from biometrics and scoring, to collection and portfolio recovery. With technology that allows each company to build its ideal credit model, Kuenta boosts the profitability of businesses and allows the consumer easy access through a friendly interface.

For Juan David Villa, co-founder and Commercial Manager of Kuenta, the credit ecosystem has become a territory full of opportunities for all types of companies, due to the dynamization of these services. “This business changed. Before, the financial system defined the credit culture and now businesses are realizing that it is possible to establish systems that are better aligned with their strategies. Kuenta accompanies them in this process so that they can access more consumers and grow in sales ”.

KUENTA |

Even businesses that have already started to create their own credit model come to their doors and seek consulting on commercial or marketing issues to achieve their goals. “We become the partner for our clients to consolidate their financing area with a precise model and adequately hedging risk”.

START FROM INCLUSION Kuenta was born thanks to the growth of Payvalida, a Colombian Fintech specialized in financial inclusion through platforms for online and offline payments. As they got to know their users in Latin America and better understood their preferences in payment methods, they saw

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the opportunity to offer them their own credit. Juan David, who has extensive experience in the financial system and the credit environment, became involved in the project to create the strategy: “we analyzed the users and found potential in low-value loans, with an initial expert scoring that reviewed the frequency of purchase, type of products they consumed, who were good customers, and we assigned a credit quota to that segment ”. These were consumers whose main means of payment was cash and who, through this benefit, could access financing plans and build their credit history on a platform they fully trusted. The results were so positive that they decided to take the project to another level, articulating

knowledge in different areas of the business. Joined by John Becerra and Jorge Vélez, cofounders of Payvalida, with extensive experience in digital payments and electronic commerce; together with Andrés Giraldo, with extensive financial and banking knowledge; and Juan David Villa with his financial background. Initially, they thought about crowdlending with a loan platform in which small investors could bet on other people’s credits. They investigated the model for months in England, Mexico and Argentina, but finally decided to look for another direction because the regulation in Colombia still did not have enough definition. “While we were working on this idea, we were presented with the opportunity to support a union entity with a tool to facilitate the granting of loans to its affiliates,” says Juan David. They created a software that reduces the risk in these services since historical credit behavior is evaluated and a rigorous identity validation is carried out. “We

Kuenta was born thanks to the growth of Payvalida, a Colombian Fintech specialized in financial inclusion through platforms for online and offline payment started with outsourced technology staff and the need evolved to such an extent that having our own team was essential.” At that point, David Velásquez, CEO of Conexcol, joined the company and the five partners began to mature Kuenta as a product: everything they saw in the market indicated that they could be a comprehensive credit platform for third parties.

KUENTA |

KUENTA TAKES CARE OF EVERYTHING In 2018 Kuenta’s work began formally as a comprehensive platform that covers all financial, legal and juridical aspects of the credit ecosystem, so that each business feels supported with customized services. They can carry out the personalized credit study according to the profiles of each client, guarantee the identity with biometric authentication, offer electronic signatures for contracts and promissory notes, deliver and disburse the credit or loan, carry out the collection and apply repayment plans. They can even offer a modular service and serve customers who need special attention at a single link in the chain. Currently Kuenta works with employee fund credits, payroll credits, consumer product financing, online biometric service to prevent identity theft, high and low amount free investment credit and even financing of medical procedures. But they see opportunities in different sectors with the potential for credit needs. “To define

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our competition in the market, we would have to group at least five or six different companies, since no one else provides this service in a comprehensive way”, confesses Juan David. That is the main added value of Kuenta: an all-in-one that guarantees security and effectiveness with a friendly interface for businesses and consumers. And for any company it is more cost and time efficient than articulating different actors for scoring, identity validation, collection and portfolio. Kuenta’s methodology not only streamlines the credit system, but also strengthens legality and fraud prevention. Villa explains: “the first thing an entity does to give you your credit is to get to know you: then we ask each person for information that we validate in external sources, even comparing the photo that they upload to the platform with that of the ID, reading the barcode of the identity document and verifying with public and private entities ”. For businesses interested in offering their own credit, this is the opportunity to avoid identity theft and protect their users’ data using Kuenta’s technological infrastructure.

CREDIT EVERY MORE FRIENDLY “The platform has to adapt to the client, not the opposite.” Kuenta’s technology is completely parametric, which allows each company to build its complete credit model, not only in terms of the profitability strategy, but also in face of its consumer. With modular technology, Kuenta sticks like one more button to request a loan in an app, web or gateway. “There is a term in the Fintech world which is ‘apification’. Financial technologies that can be integrated through an API and Kuenta is conceived in this way so that its services can be connected to any platform with a simplicity that makes it invisible to the final public ”. Thus, this Fintech opens the door to Open Banking.

"The platform It has to be adapted to the client, not the other way around ”. Kuenta's technology is fully parametric

KUENTA |

They also offer an Intuitive Marketplace, an interface that for the user is as friendly as managing a social network, although behind it is as robust as a banking core. This way it is easier to understand the process of applying for a loan and the investment risk is minimized. For Kuenta, this facility is a great strength, as it allows reaching a wider audience by presenting credit outside of the intimidating and complex context that occurred in banks. Covering a system of these proportions would not be possible without a high-level work team. The partners, all participants in the Fintech environment with different companies and investments, provide cutting-edge knowledge in technology, algorithms, programming language and financial developments. The team is enriched by personnel with experience in the main banks in the country, in technology and in legal matters, to take on every detail with an expert eye.

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THE PRESENT AND FUTURE OF CREDIT Many businesses are reinventing their strategies and channels to adapt to the changes brought about by the pandemic. Not only developing or perfecting online sales but also considering credit as an approach to people who are making a more rational management of their money in the current circumstances. All this has also accelerated changes in the credit ecosystem: digitization, automation, flexibility and personalization are some of the essential characteristics to attract consumers and reduce friction in the process. Models such as: “Buy Now, Pay Later”, which is popular in Europe and Australia, redefine the purpose of credit and create a relationship of trust with today’s consumer. These strategies that make payment conditions more flexible and give the user a

sense of control over their finances further broaden their own credit horizon for digital businesses, and Kuenta knows that it has the strengths to accompany all the new players in this environment. “Having a 100% virtual process at this time is highly valued by our clients and the end consumer,” says the Commercial Manager, aware that this will be a year of growth for Kuenta and its allies. They expect to close 2021 with a monthly average of 40,000 to 60,000 transactions, 150,000 end

users of credit and 150 companies using their full repertoire of services. At the purpose level, Kuenta wants to promote financial education and inclusion, strengthening the legality of the credit ecosystem in Latin America. It is not just about the growth of businesses but that of consumers, through accessibility and trust. They may seem like ambitious goals for a young Fintech, but a team that strives to cover it all is always thinking big.

KUENTA |

Grupo empresarial

Collective power to support causes, ideas, dreams and projects

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VAKI, THE CROWDFUNDING PLATFORM

WHAT IS DEMOCRATIZING FUNDING IN LATIN AMERICA

Crowdfunding, an English term that well translated means ‘collaborative financing’. In Latin America it can be seen as a little explored concept, but it is necessary to focus on Colombia to understand its immersion in the economy. Thus was born Vaki, a crowdfunding Fintech, perfect for emerging countries. In 2016, a platform with SOCIAL PURPOSE in its blood was launched on the atomized financing market. From its inception, the need to finance projects within everyone’s reach was clear. In this way, the founders of Vaki understood that they had to translate crowdfunding into terms or words understandable to those ordinary people or even entrepreneurs, enabling a product that would allow different types of collaborative financing such as donations, pre-sales of products or subscriptions of audiences, coexist in the same user experience.

EVERYONE CAN BECOME CONTRIBUTORS (VAKERS) AND CREATORS Have you ever heard that it is possible to “hacer una vaca” (Making a cow – in the Latin American slang) online? Well, it certainly may sound crazy, considering that doing the money collection practice has surely only been presented in person. The truth is that cows (“vacas”) are made in Vaki, and thanks to this mechanism, mostly used among friends for social purposes, it was shown that the Colombian IS supportive, despite of people might think. That is why crowdfunding IS possible in Colombia. Thanks to Vaki, the donation is no longer an act of charity, it is an act of activism.

VAKI |

Easy to use The platform helps creators to provide a first-class experience to their "vakers".

Transparency Creators and "Vakers" can view the accounting of campaigns. Unique in Latin America The structure of our company allows deposits can be made to any country in the region.

To a large extent the raid was a success, but the voices of others announced the opposite. Entrepreneurs still see crowdfunding as a great challenge. In Latin America it has not yet reached its true potential and the excellent results it can bring to the communities.

The handshake between Colombia and crowdfunding It is not a secret that the category received from an underdeveloped country by other actors called world powers, is right and because of the lack of spaces for participation that activate and build a community purpose based on innovation and local sustainability.

The investment of Colombian capital is focused on strengthening the elites. But there is little participation by financial companies that focus their gaze on the needs of our population, history and skills of Colombians. In short: Vaki seeks to promote the human resources we have.

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Colombia gave crowdfunding a handshake when it discovered that, through this mechanism, spaces for participation were created that activated and built a sense of local community based on innovation and sustainability. Vaki saw the opportunity that millions of Colombians had been waiting for a long time. Since 2016, it began facilitating a channel, with a social identity, through which people could finance their ideas, concerns, causes and projects, providing relief from the crisis of unemployment, poverty, access to education, health and much more. This is a platform that talks about crisis because it understands that clarity comes from it. The common denominator of emerging countries is to focus on the chaos that the crisis brings to Latin America, but they lose focus on recognizing the value of human capabilities. One reality of this is the void it leaves in the progress and construction of democratic communities. Vaki is capable of giving rise to the capacities of social equity to create the future that we deserve in Colombia.

Transfer rate The structure of our company allows deposits can be made to any country in the region. Design and Marketing the power is in the commuuuuunity, use the Vaki power to launch a campaign A single brand experience Unique dashboard and a commuuuuunity of vakers for any crowdfunding need

Every year remains a challenge, but even in the midst of a pandemic this platform proved what it is made of. 2020 ended with the collective financing of more than 10,000 causes and projects; and received more than 150,000 contributions. This allowed the opening of schools for the education of low-income children, non-governmental organizations that started nutrition campaigns for displaced families, the birth of independent media, entrepreneurship and many more campaigns with the slogan of “social sense”.

A “cow” for financial equality If Vaki had to give a specific reason for the emergence, the team would surely agree in saying that the intention was and is: to democratize access to finance. The resources have them and we citizens, it is only necessary to put them to flow and together help our friends; to raise money for an event, a movement, a just cause or a project with social benefit, as Nicolás Contreras, CEO of Vaki describes it in words.

Exclusively with Colombia Fintech, Nicolás told us from the birth of crowdfunding to the panorama of donations in Colombia:

Where did this idea of crowdfunding come from? Crowdfunding is not new, in fact, Mozart financed a concert with crowdfunding. The base of the Statue of Liberty was built with contributions of one cent from more than 100,000 citizens. What we are seeing now in Latin America is the understanding of the mechanism and the possibility of making it much easier.

Why do crowdfunding and not another technological financial offer? Crowdfunding is the mechanism that makes possible to democratize financing; it gives citizens the power of decision to choose which projects they want to be financed. This mechanism allows money to flow between citizens, producing societies and creating sustainable economies led by the same community leaders.

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Collection of more than 200 thousand Vakers

Are we talking about a saturated market or with a long way to go? It is a market with a lot of growth potential, any type of “cow” is crowdfunding; there is debt, equity, donation, reward, political crowdfunding, among many others that already exist and hundreds more that the market may need. In Latin America we have not been able to potentiate crowdfunding compared to how they work in other countries. What gives the local market a lot of potential to grow.

Is the Colombian considered a potential donor? Yes. This was something they told us in 2016, “that it was not a characteristic of Colombians,” but what we understood is that we had not come across leaders and projects that actively involved donors in their projects. This certainly got donation crowdfunding off the ground. In Colombia, thanks to Vaki, the donation is no longer an act of charity, it is an act of activism.

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The echo produced by contributions and donors The road is not over yet. Crowdfunding, in addition to activating, unifying and democratizing the financing of citizens, also aims to provide a sustainable economic model. With Vaki and other fundraising mechanisms it is possible to defend humanitarian crises and guarantee social responsibility in the use of money; your money, our money. The community is in charge of contributing, monitoring and deciding in what to investment. Thanks to the power of the online age, Vaki is able to spread messages of hope and inspire millions of people. In more than five years of the project, the platform has supported more than 25,000 stories in Colombia and other Latin American countries. Vaki made the big leap to the market long before the pandemic. In 2018, through the website, it gave life again to projects such as ‘A Cow for

the DeLaCalle’ and in 2019 to ‘A Cow for the Independent Network’. The first consisted of supporting the former presidential candidate, Humberto de la Calle, to pay his electoral debt to finance his political campaign. The audit of the control accounting firm P&G, released the result of the collection of resources for $ 708,388,806 million pesos. De la Calle, after having had the unconditional support of his contributors, sent a message of gratitude to all participants and especially to the Vaki platform for having fulfilled that purpose: “For me it is a source of great satisfaction to give this closing part successful, not only because of the level of collection and the volume of contributors, but also because of the transparency of the process”.

Crowdfunding, In addition to activating, unifying and democratizing the financing of citizens, it also aims to provide a sustainable economic model.

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Our product Optimized SEO for your vaki site Vakis and payments control panel More than 4 payment gateways for payments across the region Access to expert crowdfunding support during your campaign

For its part, the media announced major financial problems due to the news brought by the digital age. After the possible departure of Canal Uno, Jorge Acosta, manager of Noticias Uno, had to make, together with his team, the great decision to step aside. It was then that Vaki revived the cause of quality, independent investigative journalism. In 2021 it has a collection of $ 2,180,501,555 million pesos, used to pay the payroll of all those journalists who do professional work. The truth is that all these contributions are one more contribution to the economic sustainability of a community called Colombia. From events, trips, political campaigns, ventures, film projects, art exhibitions, books and many more reasons, which would give a whole page, are the causes why Vaki continues to give life and hope.

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THE LIMIT IS UP TO YOU “The future is collective and the power belongs to the citizens. In Vaki you will always find a product and a team committed to creating communities with sustainable and scalable economies”. Nicolás Contreras, CEO of Vaki.

Why do we say “hagamos una vaca” (making a cow)? In Colombia expressions are part of the daily life of many people, regardless of the department or region, but Colombians do not save ourselves to make ourselves understood with phrases or sentences. “Hacer una vaca (Making a cow)” is not an expression foreign to us, even to you who are reading this, a cow is defined as the financing

of some common purpose. But, like many other phrases we do not know its origin. Vaki is to teach financially and socially. The phrase “make a cow” goes back to the stories of Latin American peasants, who, at the orders of their employers, led the cattle to graze in the highest part of the mountains, where the grass was fresher and more abundant. The problem arose when the winter time arrived; heavy rains and blizzards slowed down work times. In this way they were forced to remain at the top for several days, and even weeks. And, while they waited for the weather to improve, they were forced to slaughter some cows from their own herd and satisfy the need. A phrase that is many years old, but that still means a lot to us as Latin Americans. In conclusion, we can guarantee that we are just “making a cow” for the thousands of projects

“Hacer una vaca” It is not an expression foreign to us, even to you who are reading this, a cow is defined as the financing of some common purpose.

that still need to be financed in Colombia. Citizen empowerment and the democratization of funds is the key to generating an impact in the country. Vaki’s team is ready to solve the great challenge called Latin America..

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Grupo empresarial

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The fintech that works and helps with sense

LIQUITECH

THE ONLY FACTORING FINTECH

THAT MANAGES ECONOMIC CAPITAL BY CREATING SOCIAL CAPITAL

Liquitech Capital Con Sentido SAS is a factoring fintech founded in Barranquilla in late 2018, under the leadership of Alexandra Mendoza De Castro, Master of Business Administration from Universidad del Norte, with more than 15 years of experience managing alternative financial services. Now, as CEO of the company, Alexandra leads a multidisciplinary team formed under ties of friendship, trust, and, above all, extensive knowledge and many years of experience in

the different areas that make up the fintech ecosystem, especially factoring. The consolidation of the idea of Liquitech as a fintech company was based on three premises: first, seeking the digitization and simplification of a process that usually requires a large volume of documents and steps for its execution, generating a high operational load for the actors involved in this type of operation; second, the possibility of generating financial inclusion for SMEs with little or no traditional financing possibilities; and

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Creation of a system to generate a support network to promote social impact programs

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Pedro Guinovart, co-founder Liquitech

finally, the creation of a system that would allow the generation of a support network to promote social impact programs, which would in the end feed and grow with the increase of the volume of financed invoices. Not only does the supplier benefit by achieving inclusion in the financial market with lower transaction costs, but the debtor also benefits by ensuring continuity in its supply cycle and optimization of payment terms. Liquitech, in turn, benefits by being the provider of these favorable conditions to all parties.

Since then, Liquitech has been working on developing its own platform to carry out its operations: app.liquitech, where all parties of the factoring transactions (issuers, payers and funders) converge in a way that is quick, simple, transparent and very safe. Today, through this platform, more than 150 national SMEs have been serviced, with disbursements of more than $70 billion pesos to date in factoring and confirming operations, with high customer satisfaction. As a result of the operations carried out, food aid has been allocated to more than 600 people in vulnerable conditions and a housing construction

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project for populations in irregular settlements will be started soon, in partnership with the TECHO organization. Techo is an organization present in 19 Latin American countries, which seeks, together with its partners and volunteers, to overcome the conditions of poverty faced by millions in popular settlements. Liquitech Capital Con Sentido SAS is part of the Colombian Association of Fintech Companies - Colombia Fintech - since 2019. Today, the association has 322 member companies, Liquitech being one of the few member companies in the Caribbean Region. There are only 7 companies in this industry, contributing just over 2% of the total fintechs in the country. For this reason, Liquitech strives every day to be a national benchmark in the region and seeks to replicate the creation of new local ventures that strengthen the fintech industry from this area of the country. In addition, Liquitech SAS is one of the top fintech companies recognized for its entrepreneurship and female leadership, represented by its founder and CEO. She recently participated in the Start Path Empodera program, an accelerator for Mastercard and USAID aimed at high-impact Colombian startups led by women, finishing top 10 in the first version of the program among more than 700 companies that applied. Contrary to what one might think of a fintech company like Liquitech, its processes are far from being cold and distant as they have technology as the main means of management. Its management team is aware of the great challenge involved not only in achieving financial inclusion for SMEs, whichare its target market, but also in being able to generate education in the use of technologies in order to access the company’s services. This is why the app.liquitech platform has been designed empirically but at the same time, very intuitive and user-friendly, allowing access by multiple users who have had little or no contact in financing experiences through new technologies.

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Also, itsstaff provides accompaniment and support for the integration of users in this new world, until they fully achieve the completion of their processes independently, constantly monitoring the evaluation of the experience. From the payers’ perspective, one of the key players in these processes, the operation and management of factoring transactions has been one of the biggest challenges. Solutions have been developed through other factoring companies with connectivity to the ERP’s of the paying companies, which have been satisfactory for some of them after great efforts in time and system integrations, but for others, due to issues of confidentiality and information control, these alternatives have not been appropriate. Therefore, the liquitech app platform has been a non-invasive solution bet, which allows payers to review, approve, reject, and in general, manage online factoring transactions presented by their different providers and in the same way, manage their confirming operations. As part of the complementary processes of financial and technological education, Liquitech has been actively participating in academic and business spaces in the city of Barranquilla, making it possible to advertise and share the “unknown world” of fintech and especially factoring. There are many companies that are not aware of this financing model, and others that do know about it but ignore or doubt that it possible for them to access it. Making these tools a true functional piece of the range of possibilities is one of the great challenges of Liquitech. Accordingly, Liquitech has been working actively in the construction of entrepreneurship references to support the development of new businesses in the Caribbean Region. For these projects we have worked with entities such as MACONDO LAB, a partnerin innovation and entrepreneurship, and ENDEAVOR COLOMBIA, a foundation of which today Liquitech SAS is an active member participating in different workshops and events.

THE TEAM, YOUR MAIN ASSET The Liquitech team is one of its key distinct elements and strengths. Following the lead of Alexandra Mendoza, the company was co-founded with Pedro Guinovart Escobar, who has worked for more than 15 years in positions related to the management of investment portfolios, wealth management and private banking, providing Liquitech with knowledge and reliability of an impeccable management of funders specialized in alternative investment assets, both nationally and internationally. In addition, it has recognized leaders in the industry, in its commercial and legal areas, which allows it to have a comprehensive and articulated management of all aspects that involve factoring transactions, both under its own management and third-party portfolios.

Its technology team has more than 16 years of experience in developing new technologies and new business units for technology-based companies, with proof of having developed more than 250 technological products and participated in more than 200 innovation projects. It is thus in line with Liquitech’s vision of permanent innovation, which is renewed on a daily basis. “What we did today tomorrow will be obsolete,” is one of the premises of its CEO. At Liquitech, female empowerment is a funda mental issue. The operational team is made up entirely of women, whose dedication, professio nalism, responsibility, and commitment have been key to achieving the results obtained so far. LIQUITECH |

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We seek to generate financial inclusion for SMEs with little or no financing possibilities

COVID 19 SITUATION In Colombia, many companies, especially SMEs, suffered the effects of the cessation of operations as a result of the months of confinement, to the point that some had to make final closures. Others, with great effort and with the support of the state, banks and alternative financing tools have managed to get ahead. At this point, factoring was a protagonist during these times of crisis as a non-traditional mechanism for companies to have liquidity in the operating cycle of their businesses, without having to resort to greater indebtedness. This economic emergency situation as a result of the COVID 19 pandemic made the leverage needs of many SMEs more evident, which found in Liquitech the possibility of having access to digital financing to continue with the execution of their operations. Considering that 90% of the

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country’s business fabric is made up of SMEs and that more than 60% of them have no access to financing due to the strict policies of the traditional financial sector, factoring has become the financial tool with more growth potential to support business development. For the economic reactivation, factoring also ends up being an injection of liquidity in the operating cycle that is needed for all the actors of the productive apparatus: working capital to be able to operate, to be able to continue meeting consumer demand, without the need to borrow or assume extra-bank costs. This is why the national government, through the National Tax Authority (DIAN), has been promoting the implementation of electronic factoring through the new RADIAN system to which platforms such as Liquitech SAS can be connected to democratize

Alejandro Name, Chieff Comercial Offcer

invoice purchase and sale transactions. with high security criteria, given the traceability of the securities, as it has already been done in several Latin American countries, such as Chile and Peru, where it is growing exponentially. Currently, Liquitech Capital Con Sentido SAS is engaged in a meticulous preparation to be part of the pilots under the leadership of the DIAN to put electronic factoring to work in the country, being the only participating company in the CARIBBEAN REGION this year. Additionally, it is certifying its processes in accordance with the regulations, with a trained team experienced in carrying out this type of operations, seeking to become one of the most important factoring platforms in the country. Although it is a young company, with a long way to go, Liquitech does not stop!

Currently, Liquitech Capital Con Sentido SAS is engaged in a meticulous preparation to be part of the pilots under the leadership of the DIAN to put electronic factoring to work in the country

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We facilitate investment in Grupo empresarial productive projects through our technology platform in a simple, fast and safe way.

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INVERTI COLABORATIVA FINANCING COMPANY S.A.

AUTHORIZED BY THE SUPERINTENDENCY FINANCIAL OF COLOMBIA

Inverti Sociedad de financiación colaborativa S.A.

Inverti received in February 2021, the authorization of the financial superintendency of Colombia (SFC) to establish itself as the first collaborative financing company in Colombia, which will allow it soon, once the licensing stage is completed, to develop the activity of crowdfunding. It is important to clarify that inverti is not operating yet or providing any type of financial service, in this article we are going to refer to issues that are related to the operation of inverti which will be given once the SFC allow us to operate when all the requirements be fulfilled to start the exercise of its financial activity.

INVERTI HISTORY Inverti´s history begins in 2015 when it began to explore collaborative economy options to solve the problems that exist in the Colombian real estate market. As for real estate developers, their projects require high financial leverage and the products or credits to finance their projects are limited, for this reason we consider looking for alternative financing options within which we are interested in collaborative financing or crowdfunding models.

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Definition Estate Crowdfunding Definiciónof deReal Crowdfunding Inmobiliario. Inversión Invest

Red Crowdfunding de financiación colectiva a proyectos network for qualified productive productivos a travésplatforms. de plataformas projects calificados through electronic electrónicas.

Digital marketing digital Mediante mercadeoidentifies

investors with se identifican

excess funds connect them with real estate inversionistas con toexcedentes para conectarlos in inmobiliarios various stages development in con projects proyectos en of diversas fases de

Real Estate Projects Proyectos Inmobiliarios

Platform Plataforma

investors Inversionistas

need of financing. desarrollo que necesitan financiamiento.

return Retornos

Vigilado por la SFC

inverti

This new way of investing in real estate On the other hand, real estate crowdfunding “democratizes” investments by offering new is an investment option so that people can alternatives to investors with low amounts and allocate small amounts of their capital in real allowing them to access the real estate market estate projects, allowing them to approach the that has historically been reserved for large real estate market. One of the advantages of capitals. crowdfunding platforms such as inverti is that it allows financing real estate projects among several investors, in this way facilitates access to invest in real estate with reduced amounts, opening the real estate market that until now was only intended for a small number of investors capable of contributing large sums individually. Thanks to factors such as appreciation and good return on investment, the real estate sector * is very attractive for people who previously had difficulty accessing it; With this financing Is it a good option to invest in real model, anyone can invest in real estate from estate through crowdfunding real estate one million pesos in an easy, fast and safe way platforms? through a technological platform that allows the registration process to be done in less than One of the great advantages of this new way of 10 clicks, facilitating the selection of investors’ putting money to work is that it is a historically Crowdfunding Inmobiliario. money. to the best real estate projects. profitable market. Crowdfundingvery Inmobiliario.

INVESTING IN REAL ESTATE WITH INVERTI WILL BE VERY EASY, YOU WILL BE ABLE TO MAKE INVESTMENTS FROM A MILLION PESOS.

N e c for esid ad de Need financing Necesid ad de Financiación

F i n a n builders c i a c i ówith n Medium-sized Constructores medianos an excellent track recordcon un Constructores medianos con un excelente récord son are underservedrécord by the excelente son desatendidos por el sistema traditional financial desatendidos por system el sistema financiero tradicional y necesitan financiero tradicional for y necesitan and need resources project recursos para el desarrollo de recursos para el desarrollo de proyectos.

proyectos. development.

Reduc ción de Tariff reduction Reduc ción de Tarifas

Tarifas Electronic crowdfunding Las plataformas platforms reduceelectrónicas financial de Las plataformas electrónicas de crowdfunding permiten reducir las intermediation fees, improving crowdfunding permiten reducir las tarifas de intermediación costs and returns for projects tarifas de intermediación financiera mejorando costos y and investors. financiera mejorando costos y rendimientos para rendimientos para inversionistas. inversionistas.

proyectos proyectos

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e e

I n vinvestment ersión Para to os alld I n v e r s i ó n P a rfor a to dos

Real estate crowdfunding Las actividades de crowdfunding activities have evolved as costLas actividades de crowdfunding inmobiliario evolucionado effective toolshan for individuals to inmobiliario han evolucionado como herramientas rentables para finance high-quality real estate como herramientas rentables para que las personas financien activos assets. que las personas financien activos inmobiliarios de alta calidad. inmobiliarios de alta calidad.

Conexión Connection Conexión

Real estate investment platforms Las plataformas de inversión Las plataformas de individual inversión connect developers with inmobiliaria conectan a los inmobiliaria conectan a tolos investors who want exposure desarrolladores con inversores desarrolladores con inversores individuales que desean real estate, without theexponerse hassles ofa individuales que desean exponerse a los bienesfinancing raíces, sinand las managing molestias de owning, los bienes raíces, sin las molestias de poseer, financiar y administrar properties. poseer, financiar y administrar propiedades. propiedades.

Beneficios Desarrolladores. Developers Benefit

More financing

Agility

Promotion

Más Financiación

Agilidad

Promoción

Real estate crowdfunding A través del crowdfunding provides access to a inmobiliario se accede new, better and ymore nuevas, mejores más flexible of flexiblessources fuentes de financing. financiamiento.

Technology facilitates the connection La tecnología facilita la betweenentre projects and e conexión proyectos investors, reducing inversionistas, disminuyendo approval and tiempos de aprobación y disbursement times. desembolso.

Feedback Feedback

Crowdfunding involves direct El crowdfunding implica marketing thatque helps marketing directo ayuda real apromote promoveryour su negocio estate business. inmobiliario.

Your company can accesspuede valuable Su empresa acceder a feedback from your valiosos comentarios de su online crowdfunding comunidad de financiación community, allowing colectiva en línea, lo que le you abordar to address permite posibles potential business fallas comerciales. failures.

Investor Benefit Beneficios Inversionistas.

Low investment

Bajos montos de amounts inversión

You can invest in real estate projects from Puede invertir en proyectos $1 million cop. inmobiliarios desde $1.000.000 de pesos.

Different risks and

Transparency

Diferentes riesgos y returns retornos

Diversification

Transparencia

Diversificación

Crowdfunding

Possibility to choose different investment Posibilidad de escoger horizons,horizontes risk levelsde diferentes andniveles returns. inversión, de riesgo y

With crowdfunding

El has crowdfunding tiene the benefit of el

Con el can crowdfunding you diversify se

beneficio de la transparencia transparency of

puede diversificar en donde where you invest

los miembros saben members know

varias clases activos. various assetdeclasses.

de lastransactions, transacciones, asya que

se invierte su ahorro entre your savings among

exactamente dónde exactly where these

rentabilidades.

invertirán fondos. funds aresus invested.

Potential ofdel Real Estate Crowdfunding Potencial Crowdfunding Inmobiliario (2020 C r e c Estimated i m i e n t o growth estima d o (-22027) 020-2027)

1,000

750

According to the research study conducted Según el estudio de investigación realizado por Facts & Factors, global de crowdfunding by Facts el& mercado Factors, the global real estate inmobiliario se estimó en USD 13.207 millones en 2018 crowdfunding market was estimated at y se espera que alcance los USD 868.982 millones 2027. USD$13.207 billion in 2018 andpara is expected to reach USD$868.982 billion by 2027

500

250

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

*Cifras expresadas en millones de dólares (USD)

Vigilado por la SFC

inverti

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Crowdfunding Real Estateen in the world Crowdfunding Inmobiliario el mundo. Plataformas para Crowdfunding Inmobiliario Real estate crowdfunding platforms

Investments in real estate assets have shown their benefits both in good times and in uncertain times, this type of investment is not usually affected by elements such as volatility, which occur in other types of investments. They have a long-term upward curve and absorb the effect of inflation. Another advantage of investing in real estate through crowdfunding platforms is that your capital is backed by a tangible asset, in this case a property. Some recommendations to invest safely through real estate crowdfunding platforms are: 1. Study the solidity of the platform, and Check that it is authorized by the SFC. 2. Diversify your investment in several projects. 3. Invest the money that you don`t need in the time you choose, since as in all construction projects, the estimated time may vary. 4. Review the valuation of the area where the project is or will be located. 5. Analyze the investment model.

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How will inverti work? We choose high quality projects, at inverti we are working very hard to select only the best real estate projects to publish them on our platform. We will unite the capital of many people, together, we will gather the amount that is required according to the goal established in the campaign. Capital is invested and returns are generated, for all investors, profits are generated which previously were only generated for investors with high amounts of money.

Why invest in real estate through inverti*?

You don’t need a lot of money Low risk investments Attractive returns Responsible handling of your money Diversify everything you want from a million of pesos, build your investment portfolio based on real estate assets. Trust, we will be watched by the superintendency financial institution of Colombia. Technology, you can invest in minutes and not in months.

The Problem El problema. There is currently a disconnect potential investorsyand project developers. Actualmente existe una desconexión entrebetween potenciales inversionistas los desarrolladores de proyectos

Inversionistas Inversionistas

Developers Desarrolladores

Opcionesinvestment de inversión limitadas limited options

limited access to acredit Limitación de Acceso Créditos

low on investment Baja return rentabilidad en las inversiones Baja deof productos adaptados low Oferta supply products adapted a los proyectos

to the projects

investments complicated oro Inversiones con with procesos complicados slow lentos processes

Inverti Inmobiliario

INVERTI

La solución. Thesolución. Solution La

Facilitamos la inversión en proyectos de una forma sencilla, rápida y segura.

We facilitate investment in projects a simple, fast and rápida secureyway. Facilitamos la inversión en proyectos deinuna forma sencilla, segura.

Technology Plataforma Platform

Tecnológica Plataforma Tecnológica

Our platform allows for

Nuestra plataforma permite la fast, easy and secure vinculación y la gestión de investment linkage and inversiones de una forma rápida, fácil y segura. management. Nuestra plataforma permite la

Inverti Inmobiliario

vinculación y la gestión de inversiones de una forma rápida, fácil y segura.

Multiple

Múltiples opciones investment de inversión options Inversión enopciones Múltiples Investment indiferentes different proyectos, regiones, plazos, deyregions, inversión projects, terms, retornos en el monto que el inversionista quiera. returns and in the Inversión en diferentes proyectos,the regiones, plazos, amount investor retornos y en el monto que el wants. quiera. inversionista

Democratization Democratización of investment de inversión Democratización de inversión

With investments starting

Con inversiones desde $1.000.000, at $1.000.000 cop, conectaremos a más hogares will connect more en conwe oportunidades de retorno todo el país. $1.000.000, households with return Con inversiones desde conectaremos a throughout más hogares opportunities con oportunidades de retorno en the country. todo el país.

Access to

Acceso de financing financiación Breaking down barriers Romper barrera dede acceso a Acceso to access to financing for financiamiento para todo tipo financiación allconstructores types of builders and de y proyectos. projects. Romper barrera de acceso a financiamiento para todo tipo de constructores y proyectos.

inverti

Inverti Inmobiliario

inverti

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Analysis

We are looking for the best projects throughout the Búsqueda country Buscamos los mejores proyectos por todo el país.

A multidisciplinary team of experts analyzes the Análisis feasibility and Un equipo multidisciplinario profitability of de expertos analiza la projects based on viabilidad y rentabilidad de los their experience and proyectos basándose en su algorithms. experiencia y en algortimos.

Select

Publication

Investment

The projects with the best technical, commercial and financial qualities willSelección be selected for promotion on the Los proyectos con mejores platform.

Selected projects are published on the platform and promoted with digital marketing.

Consult the projects on the platform and invest in those that best fit your needs.

cualidades técnicas, comerciales y financieras serán seleccionados para promoción en la plataforma.

Publicación

Los proyectos seleccionados son publicados en la plataforma y promocionados con marketing digital.

inversión Consulte los proyectos en la plataforma e invierta en aquellos que más se ajustan a sus necesidades.

The Process El proceso. Our projects are selected by experts with more than 20más years Nuestros proyectos son seleccionados por expertos, con deof 20experience. años de experiencia.

Market Cifras deFigures Mercado FICs FICs 21.3% 21.3%

savings in en Colombia arese ElStructured ahorro estructurado Colombia distributed in CDTs, FICsyand savings distribuye en CDTs, FICs Cuentas de ahorro y corrientes. and current accounts.

Savings and current

Cuentas de ahorro y corrientes accounts 46.8%

46.8%

CDTs CDTs 31.8% 31.8%

$250 B

250 B $170 B

200 B 150 B

$114 B

100 B 50 B * C i f r a s e x p r e s a d a s Millions e n b i l l o ncop. es de pesos (COP)

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$534 B

Totalahorro structured savings Total estructurado

Financing for a Financiamiento real estate projects proyectos inmobiliarios

Invest in an easy way, we make it simple for you, 100% online Manage your investments from your dashboard, follow the evolution of your investments Diversify without limit, invest in the project you want, like large investors. Unique, the first in Colombia as a collaborative financing company to invest in real estate, we are in the licensing process. Experts with more than 25 years of experience support our real estate investment process. The investment can be made through collaborative financing representative securities, which can only be offered through collaborative financing companies and the stock exchange. You will deposit your money in an autonomous patrimony, with patrimonial segregation, so that once the campaign’s collection goal is completed, your money with that of the rest of the investors goes to the Real Estate Trust of the project. Your investment will be managed by a segregated account that controls your resources.

If I want to invest in inverti, what do I do*? You will be able to Register to access the opportunities that we will have available for investment in real estate. Know the opportunities to invest and choose a project, know the projects that will be available and select the one that suits your investment plan. Manage your investments and profits, follow the evolution of your investments with total transparency from the inverti administration dashboard.

Through inverti, you will be able to invest in the real estate project that you want, not the one that you have to. * * (Coming soon, once we have a license from the SFC)

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Grupo Grupoempresarial empresarial Build Grupo empresarial Grupo empresarial

innovative and valuable projects from strategy to execution

122 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Sophos, THE COMPANY THAT MAKES THE FINANCIAL AND TECHNOLOGICAL DIFFERENCE

In 1999, four expert consultants in technology from India arrived in Colombia with a project just for three months. The funny thing is that the business trip became an expectation about the financial implementation in the Latin American market, especially in Colombia. This 2021 Sophos Solutions S.A.S celebrates 15 years providing solutions to financial-technological companies in the country. At the begining, investors encountered the language and the cultural barrier. In addition to this, they had to know how technology projects were developed in Colombia, their complexity and the difficulties that a company in the financial sector may encounter in adopting new technologies. Those

were the challenges set during seven years in the formation of the founders of Sophos. Starting in 2007, the founders of Sophos saw an excellent opportunity: Large companies in the financial sector in Colombia had the need to modernize their platforms and work with other world-class technology companies. However, the most important requirement to carry out this process was to find the ideal strategic partner that would allow it to fulfill the development of its implementation. In this way, Sophos was born, who did understand these difficulties mentioned and knew how to find an accurate solution.

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The first handshakes were between Sophos and Colombian companies such as Grupo Aval, Banco Caja Social and Bancolombia. At the same time, the position was being strengthened thanks to international alliances (partnership) with multinationals such as Oracle and Finacle. Sophos would be in charge of being the representative of these brands in a market that needed the update and renewal of financial technologies, while they made a difference.

Kaushal Sheth, Cofounder Sophos

“We did not want to be just any technology company in Colombia, which is normally looking to offer services in development and testing matters. From 2007 to 2010 we began to form the team in Bogotá, to train them here at the facilities and to expand to other cities such as Medellín, to provide a solution to Bancolombia ”, said Kaushal Sheth, Co-Founder of Sophos Solutions S.A.S.

AN EXPANSION WITHOUT LIMITS This project, which was born in the hands of four partners, was soon to break national borders and continue its expansion. Between 2010 and 2015 the number of personnel increased to more than 500 professionals, and with this, offices were opened in Mexico, Chile and Ecuador. But that was not enough to create a purely Latin American team. Today Sophos is made up of 90% Colombian and 10% foreign human talent, with many more experts from India and other countries where the company is located.

Gabriel Alzate, Innovation and Digital Transformation Manager

2015 marked a milestone in Sophos history. That year, the Colombian Stock Exchange (BVC) acquired this company to complement the capital markets business, backed by a technology expert company that strengthened its value offer. At that time the vision of part and part understood the importance of marking a before and after in the industry. Therefore, since then Sophos has found a strategic partner that allowed it to grow professionally. But that’s not all, from the beginning, the founders of Sophos understood the reason why they should do business in Colombia, knowing that their clients are here. It was not enough to give life to a financial strategy from a country outside the client. Sophos has expanded to provide solutions without limits in scope. Today you can guarantee this differential value in places such as: Bogotá, Medellín, Chile, Mexico, Panama, Ecuador, Peru, Brazil, Honduras, Bahamas, Canada and the United States.

Raúl Zárate, Vicepresident Global Comercial

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Digital Transformation is a process that begins with the people and culture of an organization, and follow with the definition of new business models, to achieve a change in customer experience, allowing differentiation and sustainability over time

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Digital transformation was always a key ideal in building Sophos. Twenty years ago, using those words referred to the modernization of strategies for the implementation of new technologies in niches. Today, for Sophos, digital transformation means innovation. A company that generates differential value, subject to good experiences, is a company that is capable of providing solutions to the market. “We know that any transformation is very complex, it is not only a technological challenge, but also a human talent challenge. We understand and face all these projects and changes ”, concluded Kaushal.

THE IMPACT OF DIGITAL TRANSFORMATION Sophos has a clear purpose and it is to leverage the financial industry in Colombia in its technological transformation to its score system. For 30 years we can say that Latin American banking applied the transformation with home-made products; then it went on to implement the model at the regional level. However, approximately 15 years ago this process of globalization began. From there all technological solutions give a face to the world, and of course Colombia was not going to be one of the actors that was left behind with this.

126 | FINTECH COMPANIES IN COLOMBIA ΙΙ

The Sophos team visualize these scenarios and understands how it can focus effort and capacity to assist financial institutions in what is known as core transformation. Subsequently, the market demand was pronounced against the difference between technological solutions and technology services that could leverage the development of the business. The historic boom in the financial sector occurred when companies had a robust core system, but did not yet know how to expose it to customers. In addition, in the ability to focus not on standardized services, but on clients, as a workplace. Sophos evolves to begin providing technology solutions while accompanying customers, without neglecting the concept that supports the identity of this company: Provide personalized services and provide customer-focused microsegmentation. Sophos demonstrates a plus in the industry thanks to the support of the banking sector at the national level. “The center is the end customer. For a company to have the ability to offer a personalized service, it needs a fairly high technological support. You cannot do that at the level of operational or manual processes,“ said Raúl Zárate, Global Commercial Vice President.

FINANCIAL GLOBALIZATION AS A MODEL OF IMPLEMENTATION Addressing regional needs in Colombia and other Latin American countries, Sophos adopted what they call “software as a service”. With this model, they provide world-class services at a lower level on the client size scale. One of the most important characteristics in this implementation is that any Fintech can participate and give a renewal to its business model. From the smallest to the largest companies can count on this service and notice the results. In addition, Sophos gave life to a product that became a very important value service for companies and is Bank4US. Its objective is

focused on meeting the need for a SaaS (software as a service) model backed by the experience, professionalism and quality that Sophos Solutions represents. It is the ideal platform to enable any company to launch financial products to market in a short time, using the best practices of the financial industry. Bank4US is a tool that combines modules and applications that are easy to use, innovative and close to the user. The platform allows companies to configure and customize credit products, having visibility of the product throughout its life cycle.

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Banking Is transforming

Among all the features of Bank4US stand out:

Low investment (UP-Front): as a platform

in the cloud and ready to operate, which decreases the risks of a high injection initial capital.

Time-to-market: has financial products pre-

configured that allow you to exit to the market in record time.

World-class supported solution: tools such

as Oracle (Flexcube), AWS and Bizagi are part of the strategic partners in Bank4US, which allows us to offer a low cost, but with a high quality process.

128 | FINTECH COMPANIES IN COLOMBIA ΙΙ

“Sophos is ready to face the realities financial and technological. But beyond that, we are getting ready for the future. We wantbecome that company that helps transform the business model of customers “, concluded RaúlZárate, Global Vice President Commercial.

HOW TO CARRY OUT A PROCESS OF DIGITAL TRANSFORMATION WITHIN OF THE ORGANIZATION? For a company that constantly carries the words “digital transformation” in its message, it is important to demonstrate it within it to offer that service to customers. Led by Diana Lemus, Human Management Manager, Sophos has been working on culture as a more people-oriented company. In 2020, it received recognition from Great Place To Work, as one of the 15 best companies to work for. Making an announcement to the world of work of commitment to all workers. The human talent within Sophos determines the starting point for providing quality service to customers. That is why we can define that this company starts from: Research, as a vital exercise to be able to tell clients about the panorama where it is currently, taking into account world trends in each of the branches that they point to. Innovation, generating co-creation workshops with clients. The prototyping, accompanying the understanding of the project to prototype and bring that digital product with good usability practices. And finally, development, which is

the stage that Sophos shows most strength in making customer planning a reality. Today, the company has an innovation laboratory, starring the human talent of Sophos. This area is intended for the creation of ideas for product design. The system has the necessary resources to consider doing minimum viable projects before showing them to clients. This is how Gabriel Alzate, Manager of Innovation and Digital Transformation at Sophos Solutions S.A.S defines it: “We work a lot with people. Our talent is the main asset and value we have ”. Sophos is a customer-centric company, working together with and hand in hand with them. Its pillars are focused on supporting the strategic creation of new business models, based on technologies and digital platforms, generating a new experience, to achieve a value construction that makes a difference in the market, that is Sophos.

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Experience, data and technology Grupo empresarial that help to Fintech

130 | FINTECH COMPANIES IN COLOMBIA ΙΙ

EXPERIAN, HAND-TO-HAND WITH FINTECHS

FinTechs have transformed the financial and credit market facilitating client’s access from another experience, resources, and channels to their products and services, this has allowed it to gain terrain acquiring clients with profiles and needs that would not have been of interest by the traditional financial sector and opening an opportunity to analyze the different forms of assumed risks at the moment of granting financial solutions. The world has changed in the economical environment, regulation environment, as well as social while challenging the startups to evolve, and channel their efforts to become faster, flexible and scalable, trying models in different scenarios, and have access to analysis in real time, always bearing in mind that the client must, and should be the center of all the business cycle, and keep focus in the valuation of risk management, right clients selection, and sustainable growth.

Experian has consolidated as an ally to FinTechs offering products and services tailored to fit, and combines a great quantity of available data, traditional and non-traditional resources, with its intelligent analytical tools, tools that provide highest trust at the decision-making moment such as credit approval, client management, building as such long-term relationships with adequate allies. This environmental road of transformation and constant change, has also speared processes and services innovation that add value to the companies, giving more clarity to risk valuation, and understanding that there are diverse circumstances on every client, and their behavior while soliciting credit, payment and savings, as well different debt-portfolio forms. Experian has the experience, data, technology, and knowledge to support FinTechs to make better decisions in an everchanging market.

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Amount in thousands

Fintech captation

FINTECH’S EVOLUTION IN COLOMBIA Experian has already information on more than 40 million “natural” people, and Legal from more than 11 thousand subscribers, and within them Fintech. During the later years FinTechs have grown 69% on product’s volume being opened,

and a client growth of 89%, this represents a higher brand knowledge, and new client’s recruitment, keeping a product retention relation of two per client. The portfolio’s age composition shows a considerable advance in client’s retention, for instance during 2018 only 6% of the clients had

Portfolio composition by seniority

<=24 months

132 | FINTECH COMPANIES IN COLOMBIA ΙΙ

>24 months

Amount in thousands

Market Share

MICROCREDIT

COOPERATIVE

more than 24 months from opening the account, whereas during 2020 reached 19% if clients with same age. Market share has also grown, during 2018 Fintech’s represented 0.2% of reported balance to the bureau, and during 2020 share went up to 0.5% which represents a growth increase of 46% in two years.

FINANCIAL

FINTECH

OTHERS

In the financial sector, startups provide smaller loans than any other sector, and according to risk it can be said that they dare much more to what it is equivalent; their hunger for taking risk is higher, the 80% granted credits concentrate in medium to high risk, while the other sectors look to have a portfolio with clients on a medium, and low risk profile, with higher tendency to lower risk.

Population

Risk Level

FINTECH Low

MICROCREDIT

COOPERATIVE

Medium

High

FINANCIAL

OTHERS

Average quota (thousands)

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ASSUMING THE CRISIS The most resent crisis, originated by world health emergency caused by Covid-19 notably impacted credit applications and approvals, during 2020’s first 6 months reduced in general the opening of new financial sector’s products. The decrease in the dynamic is explained by credit’s offer and demand; clients were experiencing a moment of austerity, forced them to not request credits, financial companies reduced their products’ portfolio, and increased the requirements to become eligible for credit approval. While the Colombian government eases the mobility

restrictions, and production capabilities have been reactivated, although not same volume as prior years, an increase in credit dynamic has evidently increased. Yearend numbers, 2019 vs 2020, it is too evident the effort to grow despite economic recession, the traditional financial sector accessed their portfolio of existing clients with the purpose of widening the offer and grew debt obligations with a lesser number of clients, on the other hand Fintech segment was less restrictive, attracted new clients, and grew obligations.

Captation 2019 - 2020 OTHERS FINANCIAL COOPERATIVE MICROCREDIT FINTECH

Obligations 2019

Obligations 2020

134 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Clients 2019

Clients 2020

Risk and Quota

FINTECH

MICROCREDIT COOPERATIVE FINANCIAL Low

OTHERS Medium

On a homogenous manner, the entities concentrated their efforts on keeping a similar portfolio risk mix, and from their strategy of capturing, and waving country’s economic situation, on FinTechs case, it provided and opportunity to loan to new clients, the average spot per commitment decreased 44% vs period prior to the pandemic, while in sectors such as the micro credit, cooperative and banking bound, slightly increased I a range between 1% and 4% based on the “widening” strategy. This time also brought opportunities to the FinTechs, based on their easy digital access, and to the short-

FINTECH High

MICROCREDIT COOPERATIVE FINANCIAL

OTHERS

Average quota (thousands)

term conditions, represented and alternative for Colombians to resolve their credit needs. Since the pandemic started there was a close down to contain the risk in all the financial sector, it brought along a period of relief, and deferrals so that the clients that were affected by the economic recession can manage their portfolio, without affecting their credit history. At this moment it was clear and evident the growth in payment’s default, after the expiration of the support plans guided by the government through relief plans to debtors, and it is expected to continue during 2021.

Overdue portfolio ratio 30+

Pre Covid FINTECH

MICROCREDIT

End 2020 COOPERATIVE

FINANCIAL

OTHERS

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WHO IS FINTHEC’S CLIENT?

Who´s fintech´s client?

GENDER Population1 Average quota2

FINTECH

REST OF THE SECTOR

AGE

FINTECH

COOPERATIVE

MICROCREDIT

FINANCIAL

INCOMES

1 Gender participation in the granting of credit 2 Average quota per obligation 3 Average taken from Quanto estimator

Empowering intelligent decisions Economical factors that rapidly changes, legal regulation changes, more demanding clients, and market’s dynamic conditions are forcing pressure over lenders, and significantly impacting how clients are chosen, managed, and endorsed.

Perspectives behind every decision The key to manage this complex environment and offer an optimum client’s experience depends on each stages’ decisions. Experian has the experience, knowledge, data, and technology to help FinTechs to make the best decisions, to the rhythm, and in a fast-changing market.

136 | FINTECH COMPANIES IN COLOMBIA ΙΙ

FINTECH

Pesos COP (Thousand) COOPERATIVE MICROCREDIT

FINANCIAL

In an environment of uncertainty and change, the comprehension, analysis, and modeling of the long credit life cycle, it is essential, not only for risk management, and the exposure but also to identify opportunities, and comply with the responsibilities with the regulations under evolution. Fintechs need to learn on the run, and embrace uncertainty, at the same time they work on applying speed, agility, and innovation that they are known for. Experian has the tools, data and experience to solve most complex problems, to address better decision making in client acquisitions, and clients management, to support product innovation, and profitable growth for long term business.

Experian is a company with tradition and support in the country's financial market. It is characterized by providing its clients with knowledge, security, technological capacity and a wide coverage to meet the needs of its users and clients.

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Grupo empresarial

Leaders in digital payments

138 | FINTECH COMPANIES IN COLOMBIA ΙΙ

LYRA 20 YEARS INNOVATING AND

LEADING DIGITAL PAYMENTS

Upon arriving at the reception, the artworks of Colombia, Brazil, Chile and Peru located from the entrance to the president’s office, beautify the place; this is Lyra’s headquarters, in Labège, France. A building that is together to Carrer de l’Innovation, where innovation is part of the daily chore to go every time further with digital payments. Details like these paintings and sculptures from the Latin American culture, show the connection so strong that it exists in the company with this region. Well undoubtedly, Lyra continues to fall in love with Latinoamerica. Growing in Latam at the same time that it helps its clients grow, characterized by being a multicultural, transparent and innovative organiz at ion , w i t h a g reat c ap aci t y for adaptability, strengths that the company has always had since 2001, the year of the founding of Lyra in Toulouse, France.

PAYZEN,

the bank’s and fintech payments gateway In its origins, PayZen was born to be a white label for a French bank, but its success was so great that today it is the payment gateway for 80% of banks in France, who use the solution under their own brand. Likewise, Latin America today has major players in the payment ecosystem in the region, which in its back have Lyra providing a robust and modern online payment solution for their businesses. With the ability to customize the platform 100% for acquirers, aggregators, payment processors, banks, fintech and other entities that wish to go to market with an online payment solution under their own brand, Lyra has managed to reduce companies its time to go to market and without the need to spend extra efforts on technological developments that are not part of its core.

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LYRA IN COLOMBIA In Colombia. Lyra operates since 2018 and was born after an initial investment in Brazil (Headquarters in Latam) of 4 million Euros in 2013. From this way, Lyra had reached a great dimension and it was ready to continue expanding the scope of online payments in Latin America and Central America. Positively impacting the market for online payments from Brazil, Peru, Chile, Mexico, Argentina, Colombia, Uruguay and more than 6 countries in Central America, especially, with a clear goal: accompany organizations in the implementation of a modern gateway and help to guarantee more secure transactions. That was how Lyra landed in America Latina, seeking to provide payment solutions insurance to businesses, government and fintech that has collaborated in the consolidation of a culture of digital payments in different sectors. Lyra continues to expand in Latin America and Central America, growing together with clients and characterizing itself as an organization that provides technical support and accompaniment from Bogotá, San Pablo, Lima, Buenos Aires, Mexico City and Santiago de Chile. (All own offices that have a team local technical and commercial support, which will support you best way to streamline your integrations with the PayZen payment gateway).

4 BRAND ATTRIBUTES

that make the payment gateway PayZen, be the preferred by fintech and Banks. 1. Innovation This technological solution in addition to having different online payment alternatives are pioneers and creators of the functionality of payments by WhatsApp, providers that are certified by Facebook to send payment links directly to a user by WhatsApp, with validation account and delivery traceability. Payment platform, which innovates in a constantly way creating a resource library with modern APIs, in order to make the integrations with the gateway easiest. Because it´s a gateway solution, it guarantees you security to the companies that will receive the payments directly on your checkout page complying with PCI-DSS rules.

2. Trust Have a true ally for growth of your business, and not just a supplier of technology for payments, is what allows the companies trust PayZen as their solution payment technology. Due to its efficiency, Lyra stands out for being an organization committed to the specific need of each client, with a powerful infrastructure technology and a recognized experience of more of 20 years in the global market, which has the highest safety standards for build trust in the use of the platform payments between your buyers.

Lyra's team of 400 direct employees, each one of them motivated by a passion for innovation.

140 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Alain Lacour, President and Cofounder Grupo Lyra.

In addition, Lyra is part of a select group of companies certified 3D-Secure directly with EMVCO, which makes it a company expert and provider of this cybersecurity protocol in transactions to others companies in Latam.

3. Transparency Without causing additional costs, a gateway of payments that allows you a total management of the transactions, it means that you will be able to know in detail all the information of the transactions received in your trade. This means that you can get more transparency in your operations.

Payzen allows the merchant access to a large and important amount of data to do analytics and make better decisions for the Business growth.

4. Multiculturalism With teams made up of people from different nationalities, races and religions, from origins in Mexico, Brazil, Spain, Colombia, Cuba, Asia, Argentina, Por tugal, Germany, Nigeria and France, in Lyra there is a multicultural force that has in its directive bases men and women leading alike. PayZen, is a customer-centric payment gateway with a qualified human team and that works with the benefit of customers in mind Lyra is an inclusive, multicultural corporation, that has a physical presence in 14 countries in the world, but above all, it is a fintech that each country in Latin America has, and its collaborators, in his soul and in his heart. Showing with affection the special pride that they feel for the women who are at the forefront in various areas of technology, central to the operation, allowing solutions to be consolidated

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Po w er e d b y Lyra

Generate payment links through WhatsApp. It is time to evolve the way you collect online.

with all the looks / alternatives that I can sue a user of a payment gateway. A place where Latinos, Europeans, Africans and Indians form a single visionary unit, with cons tant convic tion to provide payment solutions enriched digital, with advances and trends technologies that are at the forefront of the fintech world in the 4 continents.

protocol of 3DS cybersecurity in Colombia, what that has allowed PayZen to bring security of online transactions to another level in the country, more than any other payment gateway. Positively impacting fintech companies that they want to collect online by reducing the causes rejection for fraud; in addition to providing a reliable alternative for payers who are the ones who seek greater security in platforms to calmly use the online payments.

APIS AND PLATFORMS ECOMMERCE

that can be integrated in minutes with PayZen

PAYZEN,

experts in online transactions with the 3DS anti-fraud protocol PayZen, is one of the most recognized payment gateways in the region for its high standards of security, being the only platform in the region certified by EMVCO to operate the protocol security 3D-Secure 2.0. In 2020, PayZen was the first gateway for payments in making a transaction with the

142 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Payzen has 4 families of APIs and 6 variants of integration that comply with all PCI-DSS standards and allow authentication of buyers with the 3D-Secure 2.0. API Redirect, web checkout, API JavaScript Rest, embedded form, API Rest, Mobile SDK and webview. Additionally, Lyra has the website payzen.io documentary specially dedicated to facilitating the work of developers, enabling a complete documentation and quality. Lyra provides free access without cost to more than 50 payment modules for OpenSource e-commerce solutions (WooCommerce, Odoo, Drupal, Prestashop,

Magento, ...), native integrations for Shopify, Jumpseller, Wix, Tendenube, Totalcode Colombia among others. Likewise, payzen.io allows access to a diverse source of resources with code examples source for different programming languages including PHP, JAVA, Python, REACT, VUE, Symfony, C ++.

LYRA ALLIANCES CURRENT and that benefit businesses in Colombia The alliance between CEmprende de Innpulsa Colombia and Lyra, in an agreement to strengthen high-impact ventures with tailored, efficient and innovative online payments that provide scalability to businesses. With the Bogotá Chamber of Commerce, also there is an agreement that benefits the Cluster Of the CCB and all the companies that belong to the Chamber who choose their catwalk of payments with PayZen. In addition to agreements with large banks at the national level, which facilitates the entire process acquisition contract not present with the financial institution, helping to consolidate more ef ficient online collection processes, streamlining received online transactions for each trade by going directly to the account bank of the company / seller.

THE DIVERSITY in the means of payment as an advantage competitive Among the means of payment enabled in the gateway PayZen payment, to pay online at Colombia are VISA debit and credit cards, Mastercard, Amex, Diners, gift cards, business agreement cards; too local means of payments are received, payments with Bancolombia button, Éxito and Alkosto cards Yours, in addition to the Codensa Credit card, Big Pass, and bank transfer through PSE. In other words, at PayZen the diversity of media

payment is a competitive advantage, since it facilitates that your buyers can choose how they want to pay. When using a payment gateway like PayZen, they can pay even with Nequi, additional to receiving cash payments, thanks to Efecty, which is enabled as a means of additional payment to traditional cards already mentioned. All on the same platform of payments: PayZen.

PAYZEN, a payment gateway with 8 channels to receive secure online payments With the PayZen payment gateway, each business choose how to charge between the following functionalities available for use, searching that the collection processes are implemented online in a simple way, in a short time and without need to invest additional budgets. Having your payment provider with Lyra allows you to have acces to: 1. Payments by WhatsApp 2. Payments by IVR 3. Payments by email 4. Payment link by URL 5. Payments by SMS 6. Payments in the collection portal 7. Recurring payments 8. Payments in native applications Through APIs, from the Payzen back office or via web services, you can have different solutions to charge online from the same technological provider. At Lyra, they are always at the forefront of the digital payments market that is why they have proprietary innovations such as payments for WhatsApp, among other new methods that are popularized and they are changing the way in which companies relate to their customers. That is why the essence of all Lyra’s technological innovation, they’re headed for the breakthrough of the digital transformation of companies, achieve the unexpected, to confidently give the first step required by our clients to charge online with complete peace of mind and security in your transactions.

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143

3 PASOS PARA COBRAR

A PAYMENT GATEWAY FOR FINTECH

POR WHATSAPP Make massive and automated shipments of payment Blog - Lyra LATAMlinks by PASOS WhatsApp via PayZen3 Web Services PARA COBRAR

Benefit from a complete solution in your local and international digital strategy. Have your payment technology solution with PayZen is being able to get the most out of a global payment gateway with strong presence local, and at the same time be consolidating the comprehensive growth of your business.

3 STEPS TO COLLECT

1. Crea el link de pago

POR WHATSAPP BYWhatsApp BOT WHATSAPP desde el con elBlogvalor - Lyra LATAMa cobrar + el número de celular del comprador. 1. Crea el link de pago

1. Create the payment link

desde el WhatsApp con

from WhatsApp with the

el valor a cobrar + el

amount to be charged to the

número de celular del

buyer’s cell phone number.

2. El comprador

comprador.

Improvement in your conversion rate, find

the perfect balance in security x rate of approval.

Tr a n s a c t i o n a l

cos t reduc tion by establishing direct agreements with the media Payments

Increase your digital transactions with an omnichannel strategy

recibe el link de pago en el celular y puede pagar

2. El comprador

2. The buyer receives desde recibe allí. el link de the payment link on the pago en el celular

cell phone and can pay y puede pagar

from there

desde allí. 3. El vendedor obtiene en su WhatsApp una notificación por cada

Avoid

rejections due to false positives, parameterizing the anti-fraud module according to your business

3. El vendedor obtiene

pago exitoso 3. The seller gets que a

reciba.

en su WhatsApp una

notification on his WhatsApp notificación por cada for each successful payment pago exitoso que reciba.

he receives

¿Listo para seguir evolucionando la forma de cobrar en línea?

Find more information at:en: Encuentra más información

WWW.LYRA.COM/LA/BLOG

¿Listo para seguir la M forma enG línea? WW W .evolucionando LYRA.CO / Lde A cobrar /BLO

Encuentra más información en:

WWW.LYRA.COM/LA/BLOG

Make massive and automated shipments of WhatsApp payment links via PayZen Web Services

144 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Perú, a, a, or, ala.

LYRA IN FIGURES Lorem 20 ipsum dolor

14 years of experience in payments

countries in Latam and Central America Brazil, Mexico, Chile, Peru,Argentina, Colombia, Uruguay, Costa Rica, Panama, El Salvador, Honduras and Guatemala.

+150

countries and branch offices own in 4 continents

+170 millions of transactions /year

+100 media payment integrated

plugins for different CMS and carts Shopping

+250

265%

Increase in Latam in 2020

customers e-commerce

Lyra, allows you to strengthen your online payment system to bring your organization to the high tech level you are looking for.If you are interested in having PayZen as a technological provider of online payments, connect now with Lyra by entering:

www.lyra.com/la/ LYRA |

145

The digital platform that helps you break Grupo empresarial the barriers of the financial world and traditional investment

146 | FINTECH COMPANIES IN COLOMBIA ΙΙ

TYBA THE APP THAT IS MAKING COLOMBIA INVEST

From left to right, the three co-founders of tyba: Janice Freundt, Valdemaro Mendoza and Juan Pablo García

WHAT IS TYBA AND WHAT IS IT FOR? In September 2019, innovation, technology and finance came together to create a solution that would help democratize investments in Colombia, ensuring that more people had access to the possibility of investing; easily and safely, with low amounts and without transactional costs. Thus was born tyba, a mobile application created to help people reach their goals through savings and investment. In turn, it is the digital channel of Credicorp Capital Fiduciaria and MiBanco, entities

supervised by the Financial Superintendence of Colombia (“Superintendencia Financiera de Colombia”). Both companies are part of the Credicorp Group, one of the most relevant Financial Holdings in the region, with more than 130 years of experience in the sector. “We believe that there is great potential to generate well-being in society by helping people manage their personal finances. For this reason, tyba allows you to create investment plans so that you can be clear on how and when you are going to achieve your goals ”, assures Valdemaro Mendoza, Co-founder and CEO of this fintech.

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Images of the app, 1: Loading screen, 2: Goal creation with the 3 profitability scenarios, 3: Dashboard with balance

The app works as a digital investment advisor, incorporating the best investment advisory practices to suggest the most appropriate portfolio for each client profile. This way, Colombians can start investing in properly diversified portfolios starting at $100,000 Colombian pesos (COP), without permanence clauses and without hidden costs.

INVESTING IS FOR EVERYONE Access is very simple, secure and can be done anywhere from a cell phone. The tyba app provides easy and digital access to invest in different financial products according to the needs of each client. This completely breaks traditional ways of investing and saving money in Colombia, democratizing a service that previously few people could access. “Through tyba, anyone has the same access to investment products as high-net-worth

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individuals. Investing in entities supervised by the Financial Superintendence of Colombia and with the support of the Credicorp Group to ensure our clients that their money is always secure”, adds Mendoza. This great fintech was created thanks to the analysis, development and expertise work of Krealo, the digital innovation arm of the Credicorp Group. It is the result of years of experience in the financial sector identifying the real needs of Latin Americans, which led to the implementation of this practical solution that allows us to democratize more financial services.

BRAND VALUES For tyba, being “brutally transparent” is a fundamental part of its DNA and this translates into direct, timely and clear communication of the conditions of its products, its costs and processes’ status, while also constantly accompanying its clients with information on market behavior, economic indicators, historical

returns of its portfolios and funds, as well as possible profitability scenarios before people make their investment.

than that offered by traditional banking savings accounts.

Another fundamental value of tyba is financial education, since they recognize that this is the way to train citizens that are more aware and responsible for their personal finances, managing to contribute to the development and internal growth of the country. For this reason, the educatyba project arises, which is based on the generation of educational content around topics related to finance and investments. Through a clear, simple and friendly language, developed in different formats that are easily accessible to their clients and external public.

One of tyba’s permanent goals is to create new investment possibilities for people; which is why, after launching the app with the Collective Investment Funds product (mutual funds) in 2019, in February 2020 they launched the Voluntary Pension Fund option, with one of the most competitive commission rates on the market and that, in addition, allows to have tax benefits.

There is no doubt that tyba is beginning to break all the paradigms associated to the world of investments, providing a great opportunity for anyone who wishes to invest, to do so through savings and achieve their goals, generating the possibility of obtaining a greater profitability

tyba makes its appearance in this market with the intention of renewing a very traditional sector with an innovative and attractive proposal. A differential that is translated into the simplicity of the processes to access its different investment vehicles and the ease of being 100% digital. A solution designed so that Colombians, and very soon other Latin American countries, can invest in the achievement of their life goals in an agile and safe way.

Webinar February 2021

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BENEFITS AND SPREADS THAT TYBA OFFERS WHEN INVESTING THROUGH ITS APP: The app is a financial advisor at hand, which provides information and recommendations so that people can make their investment decisions in a simpler way. The minimum investment is from $100,000 Colombian pesos (about USD 25), which gives access to more people to start investing. Access is simple, fast and 100% digital, which means there is no paperwork or waiting lines; everything can be done from the comfort of home.

The app has no hidden costs; from the first moment, it shows its fees, which vary between 1.3% and 2.0% depending on the funds in which the client is invested.

There are no transactional fees.

has different service channels; The Experience Center, which is available to any need or requirement of customers and serves from Monday to Saturday via email, phone or

Whatsapp; as well as on their social networks that respond in less than 24 hours.

tyba is interested in people learning how to

make better decisions regarding their finances through the development of new knowledge, therefore, clients receive financial education content periodically and for free.

Security

is one of the most important attributes of tyba. All operations carried out through the app have the necessary protocols to prevent any type of fraud.

The support and experience of Credicorp is a factor that guarantees that all procedures are carried out in accordance with the requirements of the law, ensuring that the investments are in the best hands.

LEARNING TO WALK WHILE CRAWLING By June 2020, tyba already had 100,000 users, a figure which was expected to reach in December of that year, but, thanks to the impact it had on the market and the need for Colombians to find a solution to invest, the goal was met ahead of schedule. Thus, to date, it has more than 260,000 users in Colombia.

Source: team tyba

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Simular mi CDT Digital

¿De cuánto es la inversión para tu CDT? Monto de apertura

$ 7,500,000

0% papel, 100% digital, 3.25% E.A. Tasa vigente hasta el 19/04/2021 sujeta a cambios.

Calcular rendimiento

Simula tu CDT Digital con hasta 3.25% E.A y conoce la rentabilidad de tu inversión desde el principio. Escoge el plazo que más se ajuste a tus expectativas Este CDT Digital administrado por tyba, con rentabilidad y plazos ﬁjos, es un producto de:

Plazo

Rendimiento

3 meses

Tasa: 2.30% E.A.

6 meses

Tasa: 2.60% E.A.

9 meses

Tasa: 3.05% E.A.

$ 7,541,962

$ 7,593,519

$ 7,664,079

Image taken from www.tyba.com.co

In 2021 they were not going to slow down, it has also been a year full of new projects. In February they launched their 100% digital CDT by Mibanco. Term Deposit Certificates (CDT) have been a traditional savings option in Colombia, thanks to their benefits of fixed profitability, security and defined terms. According to data from “Banco de la República”, as of July 2020, in Colombia there were close to 183 billion Colombian pesos in this financial product, of which 26.7% corresponded to natural persons. tyba allows you to open a CDT with MiBanco in just minutes, from $100,000 Colombian pesos (about USD 25) without any type of paperwork, with terms of 3, 6, 9 and 12 months. The minimum amount is a differential compared to other

traditional banking entities that require higher amounts, starting from $500,000 Colombian pesos (COP) to open this kind of product. And, it has highly competitive rates compared to those offered in the market. In addition to the above, between May and June the official opening of the platform will take place in Peru, a market that has about 9 million people banked. However, investment options have been limited for most, making this country an ideal setting for the app. Since there is a significant number of people who make use of at least one financial product and who can optimize their personal finances by having access to investment products.

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Instagram post announcing the award. October 23, 2020.

On the other hand, they are also working on a new digital solution for Credicorp Capital, helping to digitalize and optimize certain services for some of their clients, who have a higher net worth than most of the app’s current clients. This new proposal, called tybaPRO, will possibly be available to investors at the end of May 2021. For now, this product is exclusively for Credicorp Capital clients.

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For all the above, it could be said that tyba is the app that “made Colombians invest”, as it is stated in its advertising campaign that won bronze at the Effie Awards last October 2020 in the Data Driven Media category, recognizing the disruptive tone of its communication compared to what is accustomed by other financial institutions, giving it a fresh and closer air to a subject that was perceived as serious and distant for the common people.

TAKING IMPULSE ON THE WAY tyba is a Fintech that is here to stay, constantly changing day by day, always looking for new ways to help clients meet their goals, not only with investment products, but also with different proposals such as its referral program, which rewards people for helping others to start their path in the world of investments; or its loyalty program called “tyba Master League”, which rewards clients according to the division in which they find different benefits, such as credits in

the app (tybs) or discounts with various ally companies, among others. By the end of 2021, tyba expects to be operating in two other countries in addition to Colombia, which are Peru and Chile, expanding its product portfolio and functionalities within the application, so that entering the world of profitable savings becomes ever easier for Latin Americans.

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SEIZE THE OPPORTUNITIES, WE MAKE IT EASY FOR YOU.

To help people to grow Grupo empresarial and fulfill their dreams, JuanchoTePresta.com offers responsible and agile credit solutions.

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AGILE ONLINE

CREDIT SOLUTIONS FOR PEOPLE WHO WANT TO PROGRESS

MAKE THAT DREAM COME TRUE

November 16, 2019, was a memorable day for the JuanchoTePresta team. On this date, with its first disbursement to a woman in Medellín, a vision that had been brewing for over a year and a half began to materialize, offering loans to an essential segment of the population historically unattended by banks and other financial entities. This vision was started by Juan Esteban Saldarriaga, Engineer Administrator of the School of Engineering of Antioquia, cyclist,

serial entrepreneur and current CEO of the company, and other investors who gave life to “JuanchoTePresta”, a startup that, in its first year of operation, disbursed more than 2 thousand loans of easy application and fast disbursements. Juancho’s idea was born from the need to complement the financial offer of other fintech and banks for a different public that could not access loans of better amounts at longer terms. Additionally, it seeks to support independent

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BRAVE: DEF: PERSON WHO IS NOT AFRAID TO CREATE THEIR ENTREPRENEURSHIP

workers who do not have access to conventional loans in financial institutions and also the population of women who have long constituted an underserved segment for such entities. Juancho is also an alternative that fights illegal credits or “shark loans” which have been increasing in Colombian households. This informal sector offers much more expensive interest rates than the formal sector and does not generate a credit

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history in the credit bureaus. Many Colombians turn out to have a medical record instead of a credit score! Although Juancho aims to be a 100% online loan alternative, easily accessible. Its objective is not focused on positioning itself as an “emergency” resource, but quite the opposite: it wants its clients to see in the platform a credit alternative to improve and implement their projects and

realize their dreams, whether in resources for their education, obtaining a vehicle, home remodeling, access to technology, taking advantage of immediate opportunities and why not, a well-deserved vacation, etc.

CREATING JUANCHOTEPRESTA It took more than ten months of construction, testing, adjustments, and implementation that allowed the first loans to be granted within the www.juanchotepresta.com platform, a functional environment that integrated more than five providers with different solutions and different geographic locations (Uruguay, Spain, Australia, Africa, among others). Definitely, one of the project’s most significant challenges was the monitoring and control in execution because defining the suppliers and building the technical and functional requirements implied making the right decisions. Always governed by the principle of transparency, the contracting processes were rigorous and detailed, specific scopes of each area were defined, and different proposals were compared. Finally, the evaluation and selection of the suppliers that would be more adjusted to the necessities of the business, allowed to start the development and commissioning of the application.

INNOVATION AS THE BASIS OF THE PRODUCT JuanchoTePresta incorporated remote biometric identity validation processes through video calls, a process in which it was a pioneer in Latin America, complying with the GAFI (Financial Action Group) regulation. Within its mobile web platform, it integrated solutions for verification of income in Social Security, integration with bank accounts, and security validations to guarantee the identity of the people and the reliability of the origination process. Likewise, it was a pioneer in the registration of Movable Guarantees of Certicámaras.

With the current regulatory framework and the experiences of other digital credit originators, the package of legal documents was designed to protect the company’s interests, where the conditions of the requested credit and the costs associated with it are clearly explained to the client. Equally necessary was to make the trademark registration and update before the Chamber of Commerce of the company, as well as the tax obligations. The teamwork’s desire to see Juancho grow made that new improvements were implemented, and with an eye into the future, they allowed themselves to dream once again with what they consider to be a fundamental pillar in the growth and future of the company, “the buy now pay later product”, which is one of the fundamental axes to work and develop from taking full advantage of Juancho’s potential, as well as the premise of promoting financial inclusion in the Colombian market and contributing to the economic growth of the country. Afterward, JuanchoTePresta identified a great potential to make alliances with the commercial sector, which had products related to the loans offered, so origination agreements were implemented, and a service named “JuanchoTePaga” begins to offer to customers partner businesses and their clients more agile financing processes without the need for paperwork and endless waits. Through different agreements, JuanchoTePaga facilitates the purchase of products in allied stores and businesses, offering an agile credit 100% online. JuanchoTePresta provides immediate request approval and cash flows with disbursements from 24 hours to the trade. It also uses several digital channels to attract new customers. Subsequently, always thinking about improving the quality of the service, a new product is created: JuanchoTeAyuda, an additional initiative that accompanies and guides customers by telephone or virtual calls in their online credit application process, to carry out the operations more efficiently and safely.

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Simulate your credit

Fill out your request

Validate identity and digitally sign contracts

Receive the money in your account

For 2021, to reward the good credit behavior of its users, the company implemented the second loan option for those clients who fulfilled their obligations on time, offering them lower endorsement costs so they can continue projecting and paying for their future.

process is entirely online, so there’s no need to have face-to-face or physical procedures unless the user does not want to use JuanchoTePresta’s technology to sign their debt quota electronically. In that case, the user can sign the contracts physically and send them by mail.

Currently, JuanchoTePresta.com has a management team with more than 15 years of experience in credit origination, which has mobilized more than 1 billion pesos in resources for individuals and SMEs.

Juancho offers multiple alternatives to his clients for the payment of installments, such as automatic debit, payment by PSE button, and cash payments through traditional channels such as Baloto, Efecty and their allied banks. If the person pays well, a positive report is made in the information centers so they can improve their score and have access to better financial products.

Future projects include increasing the amount and term so that Juancho is the friend who accompanies his clients in the crucial stages of their life.

HOW EASY ARE JUANCHO’S CREDITS? JuanchoTePresta is a company that offers free investment loans to Colombian men and women of legal age, employees, or independent who can demonstrate their income. In just 10 minutes, Juancho’s friends can fill out their online application from their cellphone or computer and receive the money in their account, in cash or use it in allied businesses instantly, without the need for a co-signer or guarantor. The user will be able to access amounts of 1 to 5 million in terms of 12, 18 or, 24 months. JuanchoTePresta performs a strong identity validation process designed to protect users against identity theft and fraud and only pays into a bank account in the debtor’s name. The

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BENEFITS FOR WOMEN In order to generate strategies that promote gender equality and support women’s access to credit, JuanchoTePresta offers a lower monthly fee to this segment, which historically pays its obligations better, which means they have a lower risk. However, although women continue to gain participation when it comes to obtaining credits, they still have restrictions to apply to amounts of greater value. According to the operations registered in DataCrédito-Experian in its report for the year 2020, women’s credits are generally used to generate income within their family nucleus, which is why they constitute a particular niche for Juancho, who precisely seeks to encourage women entrepreneurship to fulfill their dreams. Juancho continues to develop algorithms that are better suited to this audience to increasingly improve their credit conditions.

FOR THOSE DREAMS THAT DON'T COME TRUE ALONE is juancho te presta

Juancho Te Presta is a company that bets you to financial inclusion as a motor for the society development and the economy, that’s why he focuses on granting their customer’s products of higher amounts in installments better than those offered today other fintech of the market. JUANCHO TE PRESTA |

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JUANCHO RISK MODEL One of Juancho’s more significant challenges is promoting financial health and, in turn, its sustainability, which is why it seeks to monitor its clients and implement analysis models that define whether they are “eligible” to obtain the loan or not. For example, a rejection on the platform would be nothing more than an invitation to improve the credit record so the client does not incur more serious financial difficulties than necessary. Juancho has a decision engine that incorporates information from two credit bureaus in Colombia (Experian and TransUnion) and three Social Security providers, 2 Scorecards (score models developed in-house), one for women and one for men, income validation and employment status. The banking core used is Mifos X / Fineract. The risk model is not static. Juancho adapts himself to the new regulations and economic crises facing our country and optimizes the risk and collection funnel. Studies are continuously carried out to evaluate people’s credit behavior and offer solutions that mitigate fraud, always supported by data and collaboration with the areas of technology, customer service, marketing, and product development. However, the outlook has not always been encouraging. As it would be expected, this type of business is continually haunted by criminals who do impersonations and fraud. 7% of the requests in JuanchoTePresta are identified as fraudulent. However, they have been detected early and, thanks to the biometric

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videos, they have even provided evidence in judicial processes of the impersonated client. At the time of any suspicious activity, alerts are sent via SMS, emails, etc., notifying the credit request to confirm the user’s identity.

THE FUTURE OF JUANCHO JuanchoTePresta is in the process of positioning itself in the category of digital credits, competing with banks and cooperatives, using state-ofthe-art technology such as remote biometric verification through video calls and, in general, a 100% digital process. Another of its goals is to become the competition of bank drafts in MSMEs that represent 85% of companies in Colombia. In its second year of operation, the business is projected to have 10,000 new loans disbursed for a value close to 17,000 million pesos. Additionally, its growth plan considers a fundamental pillar to increase the supply of shops in which customers can make use of their credit in the allied establishments, extend terms and amounts, expand the agreements for financing housing and cars. For the future, JuanchoTePresta is focused on articulating in detail its origination, funding, and operations activities, seeking to be an actor that transforms how digital credit is conceived in Colombia, expanding its offer towards goods and services of more value that allows Colombians to find a path to progress through JuanchoTePresta.

your loan was approved! UP TO 5 MILLION 24 MONTHS

Our reason for being is the progress and fulfillment of our customers’ dreams with easily requested products, fast payout, inclusive and convenient.

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Solutions to sell and Grupo empresarial receive online payments

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PAYU: INNOVATION, SAFETY AND LEADERSHIP WITH COLOMBIAN ESSENCE

PayU is a leading provider of online payment services operating in more than 50 high-growth markets, dedicated to creating cutting-edge financial services, adapted to the needs of more than 300 thousand merchants and millions of consumers of 27 different nationalities. It is also a global investor in Fintech for a total of one billion dollars to date, focused on empowering people and whose goal is to create a world without financial borders, despite the fact that nine out

of ten people report having access To at least one financial service, three-quarters think their government should do more to improve access. Perceptions of prosperity in high-growth markets ensure that access to financial services is key to prosperity. This drives all their projects, from investing in tech entrepreneurs to offering credit to underserved people and helping merchants buy, sell and trade online. Being part of Prosus,

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Colombia is the market most important of the region for PayU. The last year the company exceeded 90 million transactions in the country and sold about 5,500 millions of dollars was responsible for driving the rapid growth of e-commerce, positive social changes of great impact such as mobile penetration, increasing levels of Internet access and digital inclusion in general, are helping so much. merchants and consumers to do business online, while new regulations are ensuring greater security for payments made by customers.

Francisco León, General Manager PayU Latam

one of the largest technology investors in the world, gives them the presence and experience to make a real impact. According to Francisco León, PayU Latam's director of operations: “We anticipate more than 500 million mobile phone users by 2025, which means that 3 out of every 4 Latin Americans will have at least one mobile service line, which means that the gap is narrowing and that translates into a greater possibility of access to electronic commerce ”. At a time marked by the pandemic, electronic commerce was key in the revitalization of the economy, it quickly became one of the best alternatives in the face of the crisis and with the changes in consumption habits, it remained a strong option, even in the face of the reopening of face-to-face commerce. But not only COVID-19

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Colombia is the most important market in the region for PayU. Last year the company exceeded 90 million transactions in the country and sold close to 5.5 billion dollars, which meant a growth of more than 46% compared to 2019. By 2021, PayU expects to complete close to 140 million of transactions in sales that can be over US $ 8,000 million, with growth close to 50%. The highlight for electronic commerce was the decree promoted by the National Government on days without VAT. During the three days, the company processed $ 243 million (average 81 million on each date), compared to the 16 million processed on average per day. This initiative was focused on the economic and multisectoral reactivation and electronic commerce was the great ally of this strategy. In this context of increase there is a key indicator of online payments and it has to do with the strengthening of talent that translates into the hiring of more than 400 collaborators and in the important investments in the technological infrastructure of the platform that allowed to overcome peaks up to 600 transactions per second.

"We operate globally

The markets where PayU operates represent more than 2.3 billion people"

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"Security experts

Protect your business and give your customers versatility and security when making their purchases online. At PayU we are certified to process transactions online with the highest safety standards"

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"Solutions according to your needs Regardless of the size of your business, with PayU you have all the options to sell online in 50+ high growth markets. Use the most appropriate collection tools for your business Sell with or without Web page!"

“Overall, Colombia is one of the countries with the most consistent performance when it comes to e-commerce spending. External data shows that the country is distinguished by its spending on fashion and accessories, where it exceeds the average year-on-year growth of the continent. This is hardly surprising, given that the national territory is constantly recognized as the fashion capital of Latin America. In reality, all sectors show a very promising growth rate ”. Affirmed Mónica Vergara, director of PayU Colombia. Colombia currently leads the ranking of the region, above Brazil, Peru, Chile, Argentina and Mexico. In 2020, the company processed payments for more than 21 million people, approved more than 200 million transactions and exceeded USD $ 7,300 million in sales, in the 7 Latin American countries where it operates. More and more businesses, companies and enterprises continue to venture into this digital sales model, which has led to an increase in the offer for the consumer. The

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Mónica Vergara, Country Manager Colombia and Panamá

growth in the number of transactions in recent times, predicts that for the next few years the growth path of e-commerce will be maintained and new businesses will be consolidated.

"We were born local At PayU, we have a 100% local approach. We work with the best local experts in payment processing, we have direct connections with acquiring banks and alternative payment methods ”.

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Grupo empresarial

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Leading the global high-impact entrepreneurship movement

FINTECH ENDEAVOR’S IMPACT IN COLOMBIA’S DEVELOPMENT

Endeavor team

The growth on the Colombian Fintech sector has been leveraged to its capacity to solve problems in an innovative way, achieving this using new technologies. This fact is backed by a 26% growth in Fintech startups in Colombia reaching 200, according to 2020’s Finnovista Fintech Radar. Specifically, in Endeavors’ vertical fintech, during the last 3 years 8 companies have been selected and are part of 12 of Colombia’s Fintech portfolio. These companies join to those of other markets reaching 64 fintech companies in Latin America, and 135 globally. Due to this growth the country is positioned as the third biggest fintech ecosystems in the region, after Brazilian, and Mexican, and it is expected to be protagonist of Latin América’s development due to all the benefits the are provided to the society.

FINTECHS FACILITATE CITIZEN’S DAILY LIVING Fintech, and digital banking services offer services from an alternative point of view, other than those from the traditional banking, and with a value proposition centered on the clientele’s experience. This fact represents an opportunity to enlarge the financial access to people and businesses. Usually, they are innovative and creative enterprises in search to make their client’s daily living much easier to handle, offering transparency, efficiency, agility, and simplicity. These attributes are possible due to the implementation of intelligent devices, and disruptive technologies that offer financial products 100% digital in a fast way, efficient, and at affordable and competitive prices. ENDEAVOR |

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FINTECH’S CONTRIBUTION TO TRADITIONAL BANKING Despite that most banks are in an internal transformation path, integrating new solutions to their operations, there still exists an opportunity to go deeper in the collaboration between banks, and Fintech companies. The expectation is to close the gap of the financial inclusion in the region and promote access to financial products and services to an unattended public. The emergence of the Fintech has moved the traditional banking to reinvent themselves to become competitive and innovate on client service. This companies arrive with a relevant solution, not only to increase the financial inclusion, but also competitiveness, innovation, and disruption in the financial sector.

BANKING SYSTEM AS AN ALLY Although at the beginning the fintech were considered a threat to the traditional banking, this vision has evolved lately, today traditional banking and fintechs are seen as complement between them and are opening an opportunity to cooperation.

and have adopted an integrative perspective with them. As an example, in October 2020 Bancolombia launched its API portal, allowing developers to create an app where bank’s data could be used. Another example is the alliance between Davivienda and Rappi (Rappipay Davivienda), which shows that the alliances between fintech enterprises, and traditional banking are possible, and that the results are very positive at digital transformation level, and potentializing of digital payments (transactions) in Colombia..

HIGH IMPACT FINTECH ENTERPRISES Endeavor drives local economy by selecting, advising, and enhance enterprises so that they can transform themselves into companies that can generate employment opportunities, and promote country’s development. Under this premise, part of Endeavor company’s portfolio is fintech, which due to their impact, are a source of inspiration for future enterprise generations. For this reason, it offers service plans, and benefits adjusted to the companies’ needs. Amongst them are:

National, and international networking (connections) to enter new markets. Consulting support by a global Endeavor Network of mentors. Join and participate at ecosystem events Support on capital-raise search, also support from their own investment/co-investment fund, Endeavor Catalyst. Direct connection to consulting companies such as Bai, EY, and McKinsey to carry on specific and relevant projects. Access to world class talent within Network companies, for short term projects, called “Fellows” Education programs design to build on skills, and accelerate companies’ growth with MBA schools, such as Harvard, Stanford, MIT amongst others.

Some banks have decided to look for investment opportunities, as well as collaboration with fintech ventures that will allow them to grow, and to have the possibility to create products and innovative services leveraged with technology, and that generate more benefits to the final consumer. Some examples are Goldman Sachs, Citigroup, and JP Morgan Chase & Co, have found an opportunity to add to their portfolio companies that may help to improve the experience offered to their clients, specially those focused in payment solutions, and capital markets (CB Insights, 2020.) Local banks such as Bancolombia, and Davivienda, Fintechs as allies to innovate in the market,

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WHAT IS FINTECH’S ENTERPRISES IMPACT Fintech’s enterprise network has strengthened the ecosystem of startups, and contributed to improving people’s quality of life, achieving a key role even during the pandemic.

Puntored Is Colombia’s biggest Fintech-as-a-service, allowing financial service and transactions monthly access to more than 8 million people. Puntored has built a strong trust relationship with over 70 biggest companies within the industry, such as banks, Telco, government, Massive Consumption Insurances, Fintechs, or retailers. Through its network, Puntored has processed or than 180MM of transactions, for a value of US 1.2 billion during 2020. Additionally, and due to its presence on 92% of the national territory, has supported more than 100,000 small independent businesses to thrive their business with Puntopay, an App that allows to receive payments with debit

Fintech Crezcamos

cards, credit, and QR, build their own online store, have access to credit to pay suppliers. Inventory management, deliveries, and offer Banking correspondence services, and clients’ phone recharge. Mr. Andres Alban, a co-founder, has identified two key tendencies in this sector:

1) Fintech-as-a-Service The companies offer their built capabilities, allowing their financial services to reach applications from other users to their financial services in a very simple way.

2) Revolution is now For payment options are under a very important revolution, new players entering the Colombian market, where we will be seeing open ecosystems payment options competing against closed ecosystems payment options, especially for retailers that up to date were only receiving payments in cash. This will be a very important process of formalizing country’s development. ENDEAVOR |

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Crezcamos This company drives the progress of lesser economic income communities through inclusive financial services. “Crezcamos” has given credits, and insurances to more than 500 thousand entrepreneurial families at national level, specially in rural areas that represent 95% of the country, contributing with the economical progress of productive farms, and companies in more than 405 municipalities. Mauricio Osorio, its founder, believes that fintechs are a complement that motivated traditional players to review their strategies to access quality financial services. All this within a regulatory scheme difficult to change since its objective is to safeguard Colombian savings.

Refinancia Due to its “Fair Treatment” policies, and their extensive experience in managing consumer’s credit, Refinancia has helped over 500 thousand clients to fix their financial situation. Has administered portfolios valued above 12 billion pesos, and it is recognized as one of the major debt-purchasers in the region, with significant presence in Colombia and Peru.

On same token, Referencia fintech has provided other financing alternatives through its Point of Sale, to circa 400 thousand consumers, in over 2000 retail stores. Their branded solution “Li$to” Pago-a-Plazos, has been greatly received, and adopted by the country’s main commercial retailers searching to offer to the commerce payment plans to their clients. Furthermore, Referencia has brought novelty to the credit products spectrum such as university students’ loans, working capital solutions for small business who required support during the pandemic.

Kenneth Mendiwelson, founder of “Refinancia”, and of “Referencia” has said “We are already experiencing Fintech’s role during this financial inclusion process. There is great expectation towards what these companies will be able to achieve, they proposal are of new innovative ways to service unattended niches”.

Finsocial A company founded by Mr. Santiago Botero creates new financial inclusion opportunities, as well as social innovation through credit solutions to over 35.000 teachers of the public

Fintech Refinancia

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Fintech Finsocial

sector, retirees, independent, and women entrepreneurs. Also, 57% of credit loans started by fintech allows the entry to the banking world to women of low financial, economic levels of Colombian rural areas. Santiago believes that what will thrive this industry will be the hard work done by each entrepreneur who belong to this ecosystem, restlessly, every day, exploring new horizons..

Grupo R5

The financial health of more than 500,000 people has improved due to the purchase of SOAT completely digital, offering the opportunity to offer discounts to good drivers using AI. Additionally, through their credit line with automobile guarantee, have helped to 300 clients to develop projects such as debt consolidation, studies, home improvement, and investment in

small businesses using higher amount credits, with lesser rates than the market. Fernando Sucre, Grupo R5’s founder, has shared his vision, which highlights that “the digital channel is the fastest growing media for acquiring financial products”. Mr. Sucre also emphasizes that “penetration of bank accounts in adult population is higher than 90%, mainly due to electronic deposits”. For Mr. Sucre the next big step it isn’t to “include” Colombians, but to “elevate them financially”.

Mesfix

This crow funding Enterprise has funded more than 200 thousand million pesos, helping more than 500 companies to get liquidity, and being a bridge to more than 5.000 investors can be rentable by getting interest rates higher than traditional banking products. During the pandemic it funded over 100 thousand million pesos.

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From top to bottom: Matteo Cera, cofounder Hogaru, Simón Borrero, cofounder Rappi, Andrés Gutiérrez, Sebastián Ortíz y Juan Salcedo, cofounders Tpaga y Tomi Pierucci, entrepeneur Endeavor

TOWARDS ACHIEVING THE OBJECTIVES OF SUSTAINABLE DEVELOPMENT (DESARROLLO SOSTENIBLES – ODS-) The fintech play an essential role in the compliance of the 17 ODS from the UN for 2030. There are many Fintech initiatives in Colombia that are focused to solve one of these issues favoring the financial inclusion of groups without prior banking access, offering financial educational, and alphabetization programs promoting payment solutions between consumers and commerce, or democratizing the access to a higher quantity of financial services through alliances with traditional entities. As a matter of fact, according to the study done by Addem Capital y Crec, with the alliance of

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Colombia Fintech “Fintechs Colombianas y su contribucion a los objetivos de Desarrollo sostenible de la ONU” states: 12 out the 17 ODS are being implemented by Fintech in Colombia. It was found that 57 companies have as an objective provide credit access to people or companies that have been excluded from the financial system, helping this way to stop poverty, promote economic growth, inclusive and sustainable, and reduce social inequality (ODS1, 8, and 10). Other companies bet on innovation promotion through solutions to formalize, standardize access to financial services for Small Businesses (Pymes), (ODS 9, and 11).

Endeavor Entrepreneur of the Year Trophy.

FINTECH FUTURE IN COLOMBIA Although it is true that the financial sector has become more robust globally, and relevant to the economies in different countries, it is too clear that this sector has seen new ways to reach to clients, operate, and been able to achieve a higher reach leveraging in technology. This is not an exemption in Colombia, and as such, we will see how this companies will work hand-tohand with the traditional sector facilitating more, and more the daily living of citizens, allowing more access to financial services, reach better banking levels, reducing informality, and do things more efficiently.

This will not only allow to democratize the access to financial services, but also it will open doors to new businesses of high impact generating quality employment development, opportunities and economical growth. Without undermining the multiplier effect in which Endeavor has believed since its origins, and which talks on how entrepreneurs of high impact give back to the ecosystem donating part of their time, reinvesting in startups, being mentors to other entrepreneurs, and inspiring new generations with their stories.

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Grupo empresarial

So that culture from savings reach all of Latin America

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COINK: PROMOTING INCLUSION WITH A PURPOSE

Imagine a world in which finance is not cold, distant, difficult, and intimidating for the majority of the population, specially to those with limited access to education and even fewer opportunities. A society where people smile when they think about finance, where their financial partner is more of a friendly acquaintance rather than a usurer predator. A relationship between financial entity and client where trust, good communication, and the financial well-being of both do not depend on a toxic relationship. Wouldn’t that be a place where many people would gladly live in that financial world, and as a result substantially improve the situation of their families, cities and their countries? That’s the world Coink is trying to build: A Specialized Society in Deposits and Electronic Payments (Sedpe for its acronym in Spanish) founded in Colombia with the objective of contributing to the development of the country and Latin America with a history and vision as noble as it is ambitious.

Financial inclusion has achieved an important place in the economic growth, development, and social equity agenda. Colombia’s growth has not been insignificant: by the end of 2020, official figures showed that 31 million adults, around 80.1% of the population has at least one financial product. Despite progress, the efforts have not been enough since Colombians still do not make proper use of financial products, a wide disparity prevails between the ‘haves’ and the ‘have nots’, and the disconnection and mistrust towards the traditional financial system still persists (see chart). Coink was created to revolutionize the way Latin Americans relate with finance. It is a company that is not only aware of the challenges involved in achieving true financial inclusion in the region, but also has disruptive strategies and innovative proposals to tackle the root of the problem.

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FINANCIAL INCLUSION IN COLOMBIA: AN INCOMPLETE TASK. There are still three fundamental barriers to financial development in the country

BIAS OF FINANCIAL PRODUCTS TOWARDS CREDITS: Savings should be the central axis of every relationship between people and the financial system. It is the habit of saving that generates the discipline of having healthy personal finances. Credit must be seen as a second step, a complement and catalyst to reach a specific objective. Nevertheless, in the eagerness to penetrate society with any formal financial product, in Colombia we have forgotten the genesis, we have forgotten about savings. In the country there are more credit products than savings products. Today there are 25 million active savings accounts, 28 million consumer credit accounts, and 40 million accounts of other credit tools.

millions

active savings accounts

INCLUSION TO THOSE ALREADY INCLUDED Even though talking about inclusion covers the extremes, we frequently fall into the trap of talking about averages that disguise less attractive realities. Financial inclusion is no exception. It is said that in Colombia financial inclusion reaches 80.1%, but who comprises that 80%? And, more importantly, who is the remaining 20%? The following map shows the penetration of saving products by political departments. While in Bogota there are 0.89 savings products per person, in Vaupes, the region with the worst savings indicators, there are only 0.12 savings products per person. It is eight times more feasible to save through formal instruments in the nation’s capital than in the remote regions of the country. It is therefore likely that the 20% of Colombians without financial products are concentrated among the less fortunate and therefore those who need them the most.

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millions

consumer credit accounts

FEAR AND LACK OF KNOWLEDGE PERSISTS The World Bank has a different methodology to understand financial inclusion advances. For Global Findex’s Database, people over 15 years old are asked if in the last 12 months they have used an account in a financial institution. In 2017, only 47% of Colombians surveyed reported having made use at least one financial account, data that contrasts with the 80.1% of Colombians who according to the financial report of the “Banca de las Oportunidades” have a financial product. The data is even more discouraging among women, young people, and people in rural areas (see figure). The discrepancy shows a reality that is as sad as it is inescapable, the reason is that Colombians do not trust in financial institutions, and do not know nor realize the importance of having their products and their solutions are not part of our daily lives. The percentage of respondents who report having an account (by themselves or together with someone else) at a bank or another type of financial institution (see definition for financial institution account) or report personally using a mobile money service in the past 12 months (see definition for mobile money account).

All

Women

Rural Area

40% More Economically Challeneged

Youth (15-24 Yrs)

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THE HISTORY: A YESTERDAY, AND A TODAY CENTERED IN SAVINGS More than 5 years ago, three young Colombians embarked in the task of promoting financial inclusion in the country. Conscious of the challenges due to the lack of opportunities of so many that live with so little, and understanding the power of the inclusion financial tools, they decided to create a financial institution that was approachable, human, and fun (yes, fun). This meant to change finance from its roots, to innovate and dare to create something radically different aimed at revolutionizing the financial world. It is under these conditions that the emblematic piggy banks or “Oinks” emerged: a friendly and easily recognized device of the financial world. The “Oinks” were created to become Coink’s genesis and for the entire world, which is what these three people wanted to create. The “Oinks” are giant piggy banks that transform coins into digital money in real time so that everyone can save with a smile. They are unique savings machines (with patent pending) conceived, designed, and produced in Colombia. They act as the bridge between cash currency and the digital world, thus closing the gap which still exists between the lack of knowledge and adoption/ acceptance of digital money. The product works like this: you download the application and open a Coink account in less than three minutes. At the end of the registration progress, a small digital piggy is born, destined to grow alongside each client as it matures financially. The entire product is designed using behavioral science and game mechanics to strengthen, through emotional dynamics, the financial health of users. With its Oinks, Coink is opening the door to the financial system for hundreds of thousands of Colombians who can enter, activate, and save in a regulated entity for as little as fifty ($50.00) Colombia pesos (around $0.13 USD). Coink, with its Oinks, is redefining the country’s financial inclusion.

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This is how Coink began to transform savings into the central aspect of every user’s relationship with their finances, the beginning and the foundation on which its other financial products are built. Coink’s product offering grew to accompany their users to take advantage of the benefits of understanding and putting to good use the financial system. The products are focused on generating healthy savings habits, collaborative finances, trust mechanisms, and tools to promote the development of wellbeing are part of the portfolio of products offered. Financial Organization and financial education: In Coink, users have at their fingertips multiple tools to turn savings into a catalyst for purpose. Goals

WHAT WE HAVE ACHIEVED TO DATE:

Over 30,000 80,6%

users.

of those users make their first deposit in the same month they download the app.

93%

of users have made at least one transaction on Coink.

AND WHAT WE WILL BE ABLE TO REACH:

users by end of 2021.

users by end of 2022.

Taking our solution to other destinations in Latin America.

and coffers can be created to organize money and reach dreams through healthy financial habits and discipline. In addition, the application has resources to educate users financially, achieving a unique intersection between education and financial health. The debit card and the Coink Bazaar: Saving is not the end, it’s the path. At Coink, this is the “First Commandment”. One of the biggest challenges is to generate mechanisms so users can achieve their dreams through smart spending. In the Coink app they have access to a feature called The Bazar, which includes an e-commerce focused on wellness. On the other hand, the debit card is a natural trust generator; in case of any eventuality,

Coink offers its users the possibility of using their savings digitally or in the more than 200,000 dataphones in the country. Communities and Co-Savings: Social finance is a world with immense transforming potential that has been little explored in Colombia. To correct this neglect, Coink created its “Communities” which are collaborative spaces for groups of people to achieve joint goals. They are an important pillar in Coink’s solution and are complemented by co-saving, which consists of saving among several participants and becomes a tool for interested parties (a mother with her child, an employer with his employee, or an organization with its beneficiaries) to collectively achieve a common goal.

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THE VISION: TOWARDS A TOMORROW OF CHALLENGES AND INNOVATION Coink has the ambition to reach 150,000 users by the end of 2021 and reach the landmark of growing to one million users in 2022. To reach this goal, its strategy includes not only new financial products covering credit, investment and alternative products (cryptocurrency– see history in diagram 3), but also expanding geographically in the country to remind new Latin American markets the importance of saving. Coink wants to accompany the Latin American base of the pyramid in the pursuit and achievement of their dreams. It wants to amaze with its products and empower all the users with transparency. Coink is here to make all of us rethink the world of finance.

AT THE FOREFRONT OF FINANCE: CRYPTOCURRENCIES AVAILABLE TO EVERYONE. Part of Coink’s future is the revolutionary cryptocurrency market, and to reiterate its commitment to innovation Coink has participating in the pilot of “Superintendencia Financiera de Colombia” (Colombia’s financial regulator). The pilot’s goal is to give space to this industry in the Colombian territory in a responsible way. Coink and Banexcoin, a Peruvian cryptocurrency exchange were selected by the “Superintendencia” to be part of this new alliances that make up this pilot. This is just the first step in a new range of services and products based on the latest technologies that Coink will continue to bring to its costumers.

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Humanized technology Grupo empresarial to your clients service

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D´UNA PERFECT COMBINATION BETWEEN INSURETECH & LENDING

Do it

SOAT FINANCED WITH ONE CLICK When we talk about SOAT, we think in a insurance that is currently part of the family basket of the Colombian families, and the statistics say that there are more than 15 million automobiles rolling through Colombia and a close figure is issued annually to the 9 million policies, figures that grow year after year; also another reference in this regard is the cost of a SOAT (Mandatory Traffic Accident insurance), which easily for a person who has a 125cc motorcycle with which he takes his support to home, the value of this insurance is more than 50% of 1 SMMLV (minimum legal salary), therefore, for many people, acquiring it is more than a luxury is a imminent need, but that with their income and the lack of financial planning (not for pleasure) they do not manage to have the value saved for their purchase.

It was in February 2020, days before the global pandemic began when Guillermo López Giraldo and Albert Serna Areiza, sitting in a restaurant in the city of Pereira, thought that the combination of a loan offer for SOAT with no initial fee, with a maximum term of 120 days, with a 100% digital process (without physical branches) and reaching audiences not served by the financial sector and who by necessity go to drop-by-drop loans, they could break schemes in the way that up to that moment people acquired SOAT, over the days they raised their CANVAS, created their PMV, got technological allies and an insurance company that would allow them to do such a crazy thing, as many told them at the beginning. Shortly before completing the first part of the project, and in search of a sponsor for this startup, Javier and Mauricio Arroyave appeared on the scene, joining the initiative with their more than 30 years of experience in the SOAT market, who

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in the currently they have a significant national production of SOAT through a little more than 3,000 points of sale, and that they saw in D’UNA and its business model, a very promising and interesting instrument to continue leveraging its commercial platform, and here it comes The other edge of the solution, and that is that on a daily basis in many of its points of sale located throughout the national territory, sales were lost because customers came to finance their SOAT (or pay with a credit or debit card), and at not having this option would lose a large number of sales. And so it was that D’UNA was born, a hybrid solution based on FINTECH technology that allows anyone, located anywhere in Colombia and from the web (www.duna.com.co), to finance their SOAT 100% in line or from one of its financing points nationwide, in a few minutes, without paperwork, without initial fee and with a term of up to 4 months. It was thus that on November 13, 2020, a dream came to light that was painted on a napkin in February and in record time, with the support of a team of wonderful people, with multiple skills and knowledge, located in Colombia, Venezuela,

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Argentina and Brazil, they managed to put a unique stamp on this fintech that is a rare and disruptive mix between Lending and Insurtech.

THE PRESENT IS D’UNA Currently, D’UNA has received an average of 300 requests per month and has been growing month by month by an average of 20%, however, exponential growth is yet to occur, since in midApril 2021 the process of expansion to Financing Points as they call it, and they hope to end 2021, reaching 800 Financing points (out of 3,000) with an average placement of 3 financed policies per month per point, to end in 2023 reaching 3,500 dispersed financing points throughout the national territory. Soon “Opera” will start to work, as they have called their chatbot, which through AI will be able to 1) Give support of any kind to customers and users of D’UNA; 2) may originate a credit or finance a policy: from greeting, taking the data, validating the identity and doing the entire followup process until the signing and issuance of the SOAT; and 3) You will be able to carry out tasks through collection RPA and marketing processes.

THE CHALLENGES? Entrepreneurship is a roller coaster in constant movement and evolution, the important thing is how you live, feel and especially how entrepreneurs adapt to what happens in the day-to-day of their companies, and definitely for D’UNA it is not the exception and that is why they consider that the biggest challenge is to be able to reach more people with their solution, and especially those who are reported in credit bureaus, since they represent 70% of the requests that are presented and there they consider there is an important market opportunity, but balancing the risk that exists in this type of business.

D'UNA comes receiving on average 300 requests per month and it's growing month to month on an average 20% month

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D’UNA AND ITS 3 PILLARS Technology: Its CEO reports that although not all technology is his own, if they viewed it from the beginning as a great LEGO, seeking to integrate external technologies to be adapted quickly, which has allowed, for example, alliances to optimize its algorithm decision, biometric identity validation, guarantees, fit open banking, integrate bank as a service services or serve as a payment option with a recognized payment gateway as your direct financing option.

Humanization of technology: for its CEO and partners, the human part, despite being a 100% digital and technology-based business, agree that it is essential in a world so marked by technology and therefore, for example, they have agents who for the moment they respond and guide their clients from 6 am to 10 pm via WhatsApp or that when their algorithm fed by easily 400 variables says that it is not possible to grant a loan, this is passed to a financial analyst who is looking for how to give the possibility that the client obtains the financing of its SOAT.

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Financial Education: This concept is taken lightly by many people and companies, but for D’UNA it is not a marketing slogan, because they are really committed to the subject and it is that for their active clients, they offer access to a video course of 15 sessions of 2 hours each, where the student learns from the mentality, habits, how to pay debts, how to save, tips for managing their credit cards, to more advanced topics such as real estate and financial investments.

D’UNA, A DIGITAL BET One decision that D’UNA is betting on is to have work teams with a flexible work modality, and for this reason, currently, part of their work team is located in Colombia for the most part, but they have collaborators who contribute their grain of sand from Argentina, Venezuela and receive support from some allies from Mexico and Brazil; And it would not be less, for a 100% digital bet from where its back end is created to serve its 2 types of clients, users who finance and financing points; And although it is still too early to completely flatten this model, what is true is that it currently works and gives results, unlike what other entrepreneurs in the Fintech or traditional sector might think.

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AND THE FUTURE…. IT IS ALSO D’UNA “On our radar in the short term” says Albert Serna Areiza, CEO of the company “we have the possibility of starting to finance the TechnoMechanical Review (RTM), Course and Driving Licenses; but in the medium and long term, we have noticed the great potential of the capillarity of the more than 3,000 financing points scattered throughout Colombia, where we can carry other

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types of products and services such as shortterm free destination loans, national money orders, Remittances, payments, drafts or loans to companies and why not, make the leap to something larger, and even in other international markets, but time will tell with its wisdom, some patience and acceptance by the consumer. of the D’UNA experience, because in the end, we do not lend money, nor do we finance SOAT to Colombians, what we do is provide an experience that is repeated over and over again “

HOW CAN A PERSON ACCESS SOAT FINANCING WITH D’UNA? We did the process, and this was our experience: We placed the vehicle license plate, the system requested the basic data of the person for the issuance of the SOAT, then it asked us how we wanted to pay it (credit card, PSE or alternative means) and there we chose The D’UNA Financing option, the calculator came out to choose between 15 and 120 days, then a form appeared asking for the basic personal data, a family reference and a personal one, the data of the company where you work. At this point the system asks to authorize the data processing and accept the terms and conditions, when doing so, a 4-digit code arrives; After this point, the identity validation stage occurs, where a selfie and an image of the identity card are requested from the front and from the back; After

passing this stage, we stayed on the platform and he asked us if we accepted the request; was sent and in about 10 minutes we received a notification with the approval by SMS and email, where some codes came with which we signed, and once signed, we obtained the SOAT of our vehicle, which arrived at the email of immediately, it was really very simple and fast. In conclusion, D’UNA is a fintech solution that allows anyone, from any device, from anywhere in Colombia, digitally (or at one of its financing points nationwide), with minimum requirements, in a 100% digital process, with a response in a few minutes, being able to access SOAT financing without an initial fee and with a maximum term of 120 days, as its CEO says, “as fast and simple as you need them”.

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Grupo empresarialSu

red the colombian network with a deep social sense

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SU RED, THE COLOMBIAN NETWORK, NOW CLOSER THAN EVER

Mauricio Álvarez Berruecos, General Manager Matrix Grupo Empresarial, Su Red

In 2013 a multiservice transactional network was born supported by an interdisciplinary team, capable of developing financial software in the national market. This is how Su Red emerged, the network of Colombians, at the vanguard of new technologies, information and communications. Currently, Su Red has the authorization and approval of the Ministry of Information Technologies and Communications -Mintic- to offer its main services such as: 1. Postal money orders: for the provision of the public postal payment service in the national territory. It has a user service network with more than 20,000 Postal office and “Su Red” APP 2. Payments: an important ally of the public sector for the payment of subsidies to the vulnerable population of the country, which can be made in cash or through electronic deposits. In this way, Colombians have the possibility of reaching hundreds of municipalities where this service did not exist before.

In addition to the above services that are approved by Mintic, Su Red also provides the following services: 1. Collects: through agreements with public and private sector entities, the collects of obligations (public services, obligations with state entities, banks, among others) and the purchase of goods and services (cell phone recharges, SOAT, subscriptions, consumer products, Lucky Games, etc). 2. Insurance: a service that offers insurance and assistance in the different branches of insurance, such as, for example: personal, automobile, pet, property and microinsurance. It is backed by agreements with institutions that provide health services and the best insurance companies in the country. 3. Credits: credit service with own resources, in order to offer the possibility to all population to access money loans for the acquisition of vehicles, houses, businesses, among others.

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In addition, you also have the option of consumer and free investment credits and microcredits. 4. Service network: a transactional network for the Putumayo and Nariño citizens, specialized in the commercialization of Lucky Games. All these services have had a great acceptance in the community thanks to the plus that the brand shows every day in Colombians: proximity. Additional to the wide portfolio, Su Red has not stopped working on the extension of its points around the national territory. To date, it has coverage in 70% of the economic geography of Colombia. “The experience of many years and the deep knowledge of the market and of our clients, has allowed us to understand their needs and to be able to create a robust portfolio of services that benefits their quality of life. All of the above has been decisive so that today, we are “the Colombian network “ explained Mauricio Álvarez, Su Red General Manager.

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A VANGUARD NETWORK After a little more than a year enduring the crisis that brought the pandemic to the entire world, companies began to create and find more challenges to standing out in the job market. Su Red made and is part of that reinvention that stands out and carries a message of confidence to Colombians in an atypical time. From the beginning of this situation, the Colombian network strengthened its digital channels, APP and Web, to offer users the possibility of accessing the portfolio of products and services without leaving home. For this, all the knowledge was implemented in sophisticated validation and payment mechanisms, applying the highest security standards. In parallel, with the sum of companies that use information technologies to provide financial services -Fintech-; we have been working to provide services with essential characteristics such as efficiency, agility, comfort and reliability, with a very clear vision of providing an experiential quality to users. In order to be at the forefront at the Latin American and national levels, Su Red had to face

this period with results and attitude, which was not easy for anyone. The panorama that was lived at the beginning led the team to rethink the priorities and the action plan, without ceasing to understand that they are a transactional network that provides essential public services to all Colombians. Therefore, they had to continue operating to make life easier for all clients, without losing the faithful conviction of guaranteeing integrity and conditions for their collaborators. This is how the pandemic took us to work more than ever as a united group, as a family; encouraging everyone to seek strategies to mitigate the economic impact and reinvent themselves to achieve the provision of the service. Thanks to Su Red and national companies, Colombia is positioned in the FINTECH market as the third best country in Latin America. For its part, foreign investment has experienced the acceptance of the Colombian public; so much so that every day it develops a large number of

projects constantly adapted to time-to-market (time that elapses from the moment a product is conceived until it is available for sale). Certainly, the current situation of the world economy has changed and evolutioned volved. For this reason, Su Red has identified more opportunities that strengthen digital transformation processes, bringing to customers new channels to purchase their services. That is why this organization has made significant investments to improve the service of its APP Network, facilitating customers to make money transfers from their cell phone or through the website www.sured.com.co. In addition, through the application, anyone can purchase the SOAT (traffic accident insurance), pay invoices to business customers, recharge and access the products of Lucky Games of the partner networks. The company keep its hard work, and that is why it decided to strengthen the technological, operational and support processes to guarantee secure transactions.

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SU RED CARRIES A MESSAGE OF FINANCIAL SOLUTION There are multiple studies full demonstrate that one of the factors of self-exclusion in the financial sector happens because some people do not trust banks. They have the perception that banks handle hidden charges on their products and that ordinary citizen is not well received in the bank offices. Due to this situation, Su Red has developed a value offer for its customers, which includes a transactional financial APP, which serves as a means of payment and savings, but also includes the best entertainment through Lucky Games, which, is a plus that makes the brand unique in the Colombian market. Additionally, the organization developed an alliance with a SEDPE (Specialized Company in Electronic Deposits and Payments), to offer a financial product called “Mi cuenta, Su Red” in its APP Network. This tool enables a wallet option as a transactional payment method, and the

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perfect possibility for customers to save on a digital medium. At the second semester of 2021, Su Red APP complements its portfolio of financial products and services with the offer of credits, insurance and digital assistance. In this way, it allows consolidating its value proposition as a close, safe and easily accessible option for all Colombians, as well as being able to strengthen their economic training through financial education campaigns. The Colombian network has been characterized by its great social sense, always seeking the provision of a close and inclusive transactional network, without ceasing to generate wellbeing in Colombians. This interest in positively influencing society extends to the job offer, currently generating more than 39,000 direct and indirect employment opportunities, based on equality, transparency and the inclusion of vulnerable populations that often remain excluded from the labor market due to different conditions or specific situations.

Su Red is identified as a company that improves the quality of life of the elderly, mother’s heads of families and the population with disabilities, through stable employment and the improvement of their conditions. As a socially responsible company, we operate thanks to our workers, who are the ones who day by day contribute with their effort to profile this company as the “the Colombian network”,

affirms Álvarez, in gratitude to the collaborators. Additionally, this is an organization that knows and understands that the commitment is not only with its clients and collaborators, but also with the needs of its allies. For this reason, thanks to these strategic alliances, it has contributed to commercial dynamics, making the physical and digital network available as a means of “cash in” and “cash out” for its businesses.

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MORE THAN A TRANSACTIONAL SERVICE, SU RED IS AN ESSENTIAL SOCIO-ECONOMIC SERVICE We know that digital transformation is reflected in the modernization of the platforms and technological architecture that support financial systems. In this sense, Su Red continues to adopt and apply the buzzword: reinvention and, each time, it shows more, in the design and implementation of a portable, elastic, modular, agile and ergonomic project, which allows its exponential growth and the adaptation of its products on both web platforms and mobile devices. Likewise, the formation of an interdisciplinary team that promotes financial solutions for the improvement of the quality of life of people, the generation of employment and additionally, the technological and corporate tools that allow carrying out this guarantee with Colombians, Through biometric implementation in more than 12,000 points, with a coverage of

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70% of the national geography, represented in 13 departments, they have consolidated the company as one of the main engines of economic and social development in the country. Su Red is a company that bets on money orders because they are an inclusive service that contributes to equality and equity. Likewise, it makes life easier for many Colombians who are waiting for their money and for those who have gained access to subsidy programs or government incentives regardless of their geographic location. More and more Colombians are interested in new options to grow their savings and take advantage of the crisis as an opportunity. Thanks to Su Red, dreams can be connected.

Su Red, committed to a service that benefits all Colombians

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AFFILIATES ECOSYSTEM CROWDFUNDING Agrapp a2censo Cannvest

Finnova KuA4

Unergy Vaki

BLOCKCHAIN & CRYPTO beriblock buda.com Koibanx

Minka NetM

TRU Valiu

Nequi

Oink

Lleida.net Mareigua Mati Mifirma MO Movizzon

ReconoSERID Rikstech Shareppy Internacional Soyyo TekBees Truora

NEOBANKS Dibanka

REGTECH 2Transfair AutenTIC Become Digital Data Innova FCC Garantías Comunitarias Lisim

BUSINESS FINANCE & FACTORING Aicoll Billy Cartera Ok Colfimax Collectpay

eBill Exponencial confirming Fisapay Greensill iProveedor

Libera Liquitech Mesfix Siigo

SeguroCanguro

Teca

INSURTECH 123 Seguro R5

AFFILIATES ECOSYSTEM |

203

DIGITAL CREDITS ABL Capital ADDI Aflore Alphacredit Avista Bancupo Bankamoda Bemus CELYA - Celulares a crédito CoFinancer Creci CrediLike CrediOrbe Crediseguro Credissimo Crédito Colombia Credyjusto Cuycli D`Una,

E-Monkey ExcelCredit Fíe Finaktiva Financap Finky Finsocial Gulungo InvestLatam Juanchotepresta Kredicity Kuenta Libertec Lineru Linxe LoanLink Matrix Kassier Mepresta Millete

Moni Mutuo OnCredit One2credit Orange Tech Pana PrestaGente Prestti Qnt RapiCredit Rayo Referencia Sempli Sistecrédito Solventa ValCréditos SAS Vivefuturo Ubuntec Wadana Wiipo

DIGITAL PAYMENTS Armatuvaca Bold Cajero Cobru Coink D-Local Daviplata Druo Ebanx ecollect ePayco Epik FIS Flexibility Flypass Global66 Goky

Imix Kupi Kushki Lacompay Lyra Mercado pago Movii Novopayment Owo Pagomas PandaID Payments Way Paymóvil Payretailers Payvalida PayU

204 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Powwi Practisistemas Puntopay Puntored Recaudia Securepay SmartCoin Sumup Superpagos Tecnipagos Towertech Tpaga Transfiriendo Tucompra Tupago Wepa

AFFILIATES ECOSYSTEM |

205

PERSONAL FINANCE AND WEALTHTECH 4told Fintech ábaco Bankiando Biocredit Carteras Colectivas contratomarco enbanca

Factcil fináncialomejor Inve.co makers Notecuelgues Resuelve tu deuda

Sesocio Tranqui Tributi Trii tyba Ualet

AFFILIATED COMPANIES (CORPORATES) accenture ach American Express ARUS Asesoftware AS-NET ASOPAGOS assendared Atlas Transvalores AV Acciones y Valores Bancamía Banco de Bogotá Banco Pichincha Bancoldex BBVA Belvo BMC bvc Bytte Cacao paycard solutions citi Clouxter comfama

Credibanco Credifamilia Crédito Ris credivalores CVN dale! datacrédito experian Datalytics Digital Consulting Group evertec EY Fiduoccidente FGA Financiera Juriscoop Find RSE fluid attacks FNG Gases del Caribe Giesecke+Devrient Giros & Finanzas GFO GM Financial Grupo Coomeva

206 | FINTECH COMPANIES IN COLOMBIA ΙΙ

Heinsohn Idemia Kandeo LexisNexis Risk Solutions Mambu mastercard nimmök Novatec Nuvu Olimpia pwc Redeban Revelock Santander Consumer Scotiabank Colpatria seguros mundial Serfinanza skandia Sophos TransUnion Todo 1 Veritran Visa

Creating the financial and technological future of Colombia

AFFILIATES ECOSYSTEM |

207

Acknowledgements This second issue has been possible thanks to the unconditional support of my daughter and wife, who gave me daily encouragement to work on it. I warmly thank everyone who has helped and supported me and make this book today be a reality. To all the design team led by Beatriz Osuna, who did a magnificent job; to the Promograf team leading by Germán Izquierdo, who take care of every detail so that the printing and binding is perfect and thanks to my father for his valuable support. To the invaluable support of the Colombia Fintech Association, led by Erick Rincón who with his great energy, positivism and work, received with great welcome this new initiative; to his board, members, who kindly took time to listen to me, to share their stories, experiences, knowledge and dreams. To all the valuable team in each of the companies of the Fintech ecosystem in Colombia, who with their great work, effort, talent and dedication have made Colombia a benchmark country in the Fintech world. A very special thanks to: Andrés Albán, Erick Rincón, Santiago Botero, Germán Jaramillo, Andrés Leal, Hernando Rubio, Juan Esteban Saldarriaga, Alexandra Mendoza, Freddy Castro, Andrea Giraldo, Enrique Candanoza, Juan Pablo García, Felipe Lega, Camila Salamanca, Nuno Lopes Alves y Alejandro Beltrán, for their very valuable articles that enrich this work. To all the companies that are part of this edition, who generously shared their history, effort, work, tenacity, enthusiasm, energy, dedication and passion: Finsocial, ecollect, Payválida, Superpagos, Kuenta,Vaki, Liquitech, inverti, Sophos, Experian, Lyra, Tyba Juancho te presta, Pay U, Endeavor, Coink, D´Una, Sured; companies with a great commitment to our country and that have allowed this book to become a reality and thanks to you dear reader, I hope you enjoy this book. I thank you all for the infinite patience you have had for me. Thanks a lot Javier Raventós

Fintech Companies in Colombia II. Challenges and achievements

Articles inside

ACKNOWLEDGEMENTS

SU RED

COINK

PAYU

TYBA

LYRA

PAYVÁLIDA

INVERTI

SOPHOS

ECOLLECT

FOREWORD

THE CHALLENGES OF THE PROPTECH RE

PRESENTATION