RAPICREDIT

RAPICREDIT THE NEW GENERATION OF FINANCIAL SECTOR

According to figures from the World Bank, around 2.5 billion people do not use formal financial services and 75% of the poor do not have a bank account. Inclusion is key for reducing poverty and promoting prosperity. In Colombia we have the challenge of financially including more than 6 million people, for this there are companies such as RapiCredit that contribute to reduce the gap between those who can obtain a loan and those who do not, through quick and shortterm personal loans. It is one of the 03 young companies of fintech located in 15 of the 18 countries of Latin America1 .

This company is in a constant process of research and development, to structure and launch financial credit products aimed at the Colombian

1 Source: Fintech- Innovaciones que no sabías que eran de América Latina y Caribe. (Finovista - BID. 2018) citizens making easier and better their customer experience; in this way, it meets the needs for a good part of the population who did not have a direct loan service before. Therefore, the company finds more value in the information that it gets from its customers that in the amount of money that it moves in loans, since it allows it to be more efficient and effective when proposing new products and ways of interacting with them. It has managed to put into circulation in the formal economy more than 200 billion pesos in loans; loans that have paid taxes and that have allowed many people from strata two and three overcome emergency situations through a legal system. It currently grants more than 30 thousand online quick loans per month and in almost 6 years of operation it has managed to reach more than 580 thousand credits that have made life easier for thousands of Colombians.

RAPICREDIT THE FUTURE OF THE FINANCIAL SECTOR IN COLOMBIA IS NOW!

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

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

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

About 42% of bank offices in Spain had closed for year 2018, since their consumers preferred to make their transactions digitally and only a part of them, an increasingly smaller “generation queue”, opts to stand in lines or wait turns to be attended by the entities officers. Perhaps saying that traditional Colombian banking as we know it is going to disappear completely, is not totally accurate, however it can be said that there will be a migration of their operations towards digital and that those who have a strong technological adaptation, will probably survive; that means, the entities that choose to be more similar to what RapiCredit is today —and of course, other fintech entities— will be the ones with the most options to project into the future.

A financial business, with a social basis

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

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

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

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

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

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

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

What lies behind a lending

Although at first glance the business of RapiCredit appears to be the loan of money through an easily accessible digital platform, its scope is much deeper and more extended when viewed from the correct point of view. The benefit goes much further of the economic aspect in the short term by the collection of interests on each transaction added to the social impact discussed earlier. The real business behind its operation lies in two fundamental things, collecting information from its consumers and the financial education it provides.

While traditional banking worries for analyzing specific data about credit history and current financial situation of a borrower to conclude whether he is eligible or not; fintech companies, due to their technological nature, have access to crossed information through big data, which provides the ability to analyze through algorithms, not only the financial evolution of its customers, but important aspects of their life, facilitating the analysis of the customer’s needs.

For example, if a customer five years ago made a loan to pay his degree fees in college, two years later he borrows another to pay a vehicle fee, and a year later, he borrows to pay his honeymoon, by data analysis, it can be anticipated to offer a loan for the preparation for the arrival of a newborn child next year, or perhaps, for buying a property. In this way, the company has the possibility to anticipate and take the first step, and the client will know how appreciate the offering.

With regard to financial education, the platform of access to RapiCredit services gives the possibility of receiving formal information, regarding the correct way to achieve financial “good health” turned into tips and advices for the proper management of personal finance, promoting the importance of savings, the rational use of loans and even it provides the client with a tool for managing his income and expenses budget. Furthermore, the interaction dynamics of the operations, the effect of its behavior and the generation of cross-sectional data that create a credit history, provide practical training.

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

The challenges of RapiCredit

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

RAPICREDIT EN CIFRAS

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

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

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

Passion for the association

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

Thus, the Asociación Colombiana de Empresas de Innovación Tecnológica y Financiera : Colombia Fintech (Colombian Association of Technological and Financial Innovation Companies) emerges. At first, thirteen companies met with this purpose in November 2016; by the beginning of 2020, there are almost two hundred companies in this association, there are even eleven financial regulated entities, the most important banks in the country are within the association and working tables have been created around payment systems, credits, factoring, legal issues, digital identity, which have brought great benefits and enormous rewards.

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

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

Fintech from Colombia, to the world

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

By 2020 the Ibero-American Fintech Association was composed of 13 associations and 23 countries. They are in the process of creating a legal status for a non-profit company in Panama. They have a board of directors that changes the country every year: in 2019 it was in charge of the Brazilian association, by 2020 it will be Colombia who bears the responsibility.

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

EQUIPO RAPICREDIT

Andres Rubiano Chief Financial Officer Economist with a master’s degree in finance, with more than 11 years of experience in corporate finance. Ysamar Meza Chief Risk Officer Mathematician with a master’s degree in Analytics for Business Intelligence, with 6 years of experience in the development of analytical solutions, focused on the credit cycle.

Daniel Materón Chief Executive Officer. Systems Engineer with several specialties such as marketing and sales, he is the founding partner and executor of the rapicredit strategy. Sebastian Arenas Chief Technical Officer. Systems Engineer with specialization in IT and MBA candidate, more than 15 years of experience leading teams Liliana Andrade Chief Operating Officer Systems Engineer with Specialization in Operations and Production Management, more than 9 years of experience in e-commerce and fintech.

Luisa Martinez Chief Marketing Officer. Business Administrator specialized in strategic marketing and more than 10 years of experience in digital marketing.

Maria C. Castro Customer Service Agent Industrial Engineer with a master’s degree in marketing, 8 years of experience in the design and execution of sales strategies, guaranteeing an adequate customer experience. Diana Zapata Product Manager Industrial Engineering with more than 8 years designing commercial strategies and developing projects aimed at technological innovation for the financial sector.

www.rapicredit.com

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

To end this chapter of RapiCredit’s Goodwill, it remains to be said that the main component of its work team, which by 2020 has almost 80 people, is professionalism and optimal competencies required for performing each function, but each and every one of them is a human being with a high degree of social sensitivity. Those two ingredients are key for being part of the team, otherwise, the attention of the thousands of customer attended every day would be outside the philosophy with which the company was created. RapiCredit despite being a young organization, has relevant elements that lead it to grow up in its corporate governance and it understands that a good governance is a key to the operation of any company and the professional performance of its administrators and executives. They work to incorporate the corporate culture and internal functioning of good practices without neglecting strategic management and operational efficiency.

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

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