CÁMARA DE COMERCIO DE BOGOTÁ

THE BOGOTÁ CHAMBER OF COMMERCE. POSITIONING THE CITY POSITIONING THE CITY AS THE MAIN INTERNATIONAL FINANCIAL CENTER AND AS A FINTECH HUB OF THE ANDEAN, CENTRAL AMERICA, AND THE CARIBBEAN REGION

“The number of Fintech companies in Colombia grew 26% in the last year and registers a total of 200 companies with a representation in Bogotá of 67% of the Fintech ecosystem at the national level” (Fintech Radar of Finnovista 04/30/2020).

THE CCB AND ITS PROMOTION TO THE BUSINESS SECTOR

The Bogotá Chamber of Commerce, a private non-profit entity, founded in 1878, works forward building a long-term sustainable Bogotá - Region, by promoting increased prosperity of its inhabitants, based on business services and the improvement of the environment for business. Its higher purpose is focused on serving collectively so that there are more and better entrepreneurs and companies, thus achieving a more prosperous and equitable society in Bogotá and the region.

The Chamber is at the core of building equity and well-being at the local, regional and national levels. The Entity is a source of political stability and the generation of employment and opportunities for the vulnerable population and the business sector, understanding that the fate of society is that of the private sector and that its future is a direct consequence of the work, resources and efforts that be guided in this purpose.

The strategy and operation of the Bogotá Chamber of Commerce generates benefits for entrepreneurs through programs and projects aimed at claiming the role of the businessman in society, promoting in them a change of attitude towards their role and their relationship with society and the environment. The strategy focuses its efforts on micro, small and mediumsized companies, which represent 99% of the business fabric of Bogotá and Cundinamarca and is aimed at promoting the territorialization of services and activities throughout its jurisdiction, prioritizing resources to promote transformation technology of the companies, and design new and better mechanisms that allow increasing the income to the organization to sophisticate the solutions offered to its target audience. In the present, with greater impetus and relevance, given the scenario of the global pandemic (Covid-19) that threatens the health of human beings and negatively affects the economic development of different nations, the Chamber is in a reinvention process to support entrepreneurs at this juncture and accompany them in promoting their productivity, innovation and the use of new technologies, critical and necessary factors to give continuity to economic development and business sustainability.

In this context, the CCB leads efforts that are materialized in three main strategic lines of action, in addition to the natural function delegated by the State for more than 70 years, of administering and managing the public records associated with the formal operation of the Business. In the first instance, and with the purpose of generating greater added value to formal companies, the Chamber designs and permanently offers a robust and comprehensive portfolio of services aimed to promote entrepreneurship and business strengthening in the city and in the region, developing thus, the capabilities of entrepreneurs through an offer, mainly free, to increase their productivity in all stages and cycles of business development. These services include a value offer that ranges from guidance to bring an idea or business plan to reality, to accompaniments with a greater degree of sophistication, associated with the management of innovation and the internationalization of business.

In the second instance, the Entity leads the civic and social dialogue on behalf of the business sector with different public and private enterprises at the local, regional and national levels to address cross-cutting problems that impede economic, social and environmental development. of the business environment in the city and region.

With a clear and forceful sectorial vision, in third instance, the Chamber exercises the Technical Secretariat of the Regional Competitiveness Commission of Bogotá-Cundinamarca, under which the Competitiveness and Innovation Agenda is developed, also known as the Intelligent Specialization Strategy (EEI), whose objective is to sophisticate and diversify its productive apparatus, through a long-term, public-private collaborative effort that fosters

sustainable economic growth in the region with emphasis on five strategic areas aligned with its productive vocation.

This strategy materializes the sectorial vision of the organization, through the leadership of an agenda of 17 cluster initiatives in Bogotá and the Region, institutional arrangements that, in a collaborative way between public, private and academic actors, and with a sectoral emphasis, boost productivity and competitiveness of these 17 economic agglomerations in the territory.

This agenda manages and executes specific projects and actions to respond to the main bottlenecks that limit the competitiveness of these Clusters. In order to expand the information related to the Chamber and its Subsidiaries and in particular the response to the needs of companies during the Covid - 19 situation, they can enter www.ccb.org.co.

THE CCB AND ITS MISSION

TO POSITION THE CITY AS THE MAIN INTERNATIONAL FINANCIAL CENTER AND FINTECH HUB IN THE ANDEAN, CENTRAL AMERICA AND THE CARIBBEAN REGION.

The determination of CCB to work boosting the productivity and competitiveness of entrepreneurs in the city, and the region, has led one of the most important cluster initiative agendas in Latin America for eight years. This agenda allows public and private players, and a total of close to 100 entities that exist today in Colombia. Multiple national and international recognitions and impacting results in the implementation of these clusters have positioned the city as one of the territories with the most solid and sophisticated institutional arrangements for the development of these agendas, in which public, private and academic players share a vision, to build work plans and execute projects and actions that stimulate the competitive development of the productive interests of the city and the region. Within the portfolio of 17 cluster initiatives led by the CCB, since 2017 the Cluster of Financial Services of Bogotá and Region initiative has been promoted, a joint effort supported by an institutional framework made up of about 220 public and private actors, academia and entities that support the local financial sector, that actively and permanently promote projects and actions to position Bogotá, in 2026, as the main International Financial Center of the Andean, Central America and the Caribbean Region. This bet is based on the fact that Bogotá is the financial center of Colombia and one of the most important in Latin America. In Bogotá, 57% of the country’s financial transactions are carried out and the Cluster in the city is represented, as of 2019, by more than 4,600 companies (46.7% micro, 28.7% small, 15.6% medium and 8 , 9% large), which contribute around 10.7% of the city’s GDP and generate more than 91,000 direct jobs.

The business environment of Bogotá allows highlighting different factors and attributes that undoubtedly contribute to the positioning of the city as one of the main financial centers of the Andean, Central America and the Caribbean Region.

BOGOTÁ BUSINESS ENVIRONMENT

ECONOMIC MOTOR GDP of US $ 105 billion (32% of national GDP), has surpassed countries like Panama (US $ 65 billion) and Uruguay (US $ 60 billion). GDP per capita of US $ 9,247, US $ 2,600 above the Colombian average. Diversified economy. Services sector (60% of GDP), commerce (20%) and manufacturing (10%). Largest center of consumption, 11 million consumers, 22% of the country’s population. 51.6% (2016) of the population is middle class. Average growth of 3.6% in the last 10 years, above the LATAM average.

HUMAN TALENT With an economically active population of more than 4.6 million people, higher than that of competitors such as Mexico City (4.5) and Santiago (3.3). 120 higher education institutions that graduate 188,000 students per year, of which more than 44,000 have a postgraduate degree. It concentrates 43% of the Ph.Ds., 35% of the technicians / technologists in Colombia and is home to two of the best 10 universities in Latin America.

FOREIGN INVESTMENT US $ 22,000 million of foreign investment in new and expansion projects between 2008 and 2018. More than 1,500 companies with foreign capital are registered today in Bogotá. Bogotá is the 3rd city with the best investment attraction strategy in Latin America according to fDi Magazine.

Source: Invest in Bogotá, Foreign Investment Attraction Agency of Bogota (2019).

Additionally, today Bogotá, due to the management of the Financial Services Cluster initiative, was positioned -according to the Findexable Global Fintech Index 2019 report- as the third Fintech Hub city in Latin America, behind Sao Paulo and Mexico City, the main exponents and leaders in the region.

This is based on the fact that more than 85% of the companies and players of the national financial sector are located in Bogotá.

The city concentrates the operation of 26 banks with a national presence, among which Citibank, Scotiabank, BBVA, Santander, Itaú, and BNP Paribas stand out, among other banks of international stature that compete in the local market. Additionally, the Colombian Stock Exchange and the Colombian Mercantile Exchange, the main players in the country’s capital market, have a presence in the city.

In terms of financial innovation and the fintech ecosystem - according to the Fintech Radar of Finnovista 2020 - the city is today the third Fintech Hub in Latin America, after Mexico (441 - 2020) and Brazil (377 - 2019). The above is understood to the extent that 67% of the country’s fintech companies are located in Bogotá, representing more than 134 companies. The fintech sector had an average growth rate of over 27% in the last two years, in 2019 with 29%, and in 2020, with 26%, a situation that demonstrates the real need for innovative financial products and services, and evidence the prospect of growth in the future. In terms of the fintech business segment, one in four companies is in the loan segment and one in five in the payments and remittances segment.

The fintech ecosystem is mature, 37% are in a growth and expansion phase, and 34% are ready to scale nationally and internationally. About 13% of fintech companies were launched in the last year. Currently, and with a contribution to job creation of more than 7,000 jobs, 84% of fintech companies are micro and small companies and have less than 50 employees, exposing a diversity in profiles, skills and competences. 16% of fintech companies have more than 50 employees, a condition that shows the window of opportunity for growth and expansion in the national and international market.

The level of internationalization of fintech companies is highlighted, to date 30% of these are operating in the markets of Chile, Peru and the United States. Colombia’s export dynamics in this industry surpasses Brazil and Mexico, leaders in the region. In relation to the dynamics

of foreign investment in 2020, 61% of fintech companies have been leveraged by international venture capital funds. In relation to this same dynamic, including local and national funds, in 2019, more than 40% of fintech with investment have leveraged figures above US $ 500,000, and 17% of these have achieved an investment attraction of more than US $ 3 millions.

These figures are expected to increase notably in the coming years, given the legal authorization (Decree 2443 of 2018) of investment in financial technology companies by financial institutions in Colombia.

The financial innovation ecosystem in Bogotá is dynamic and diverse. Traditional entities and, especially, the main business groups in the country respond to technological trends. Examples of this are the advances made by Davivienda of Grupo Bolivar with its innovation strategy “Domo i”; the strengthening of the innovation strategy of Grupo Bancolombia with the opening of its innovation and entrepreneurship center in the city of Bogotá; the promotion of Grupo Aval’s digital strategy, which concentrates the digitalization of the financial services of its four banks, among other innovation and digital transformation strategies led by national and international banks to address the increasingly sophisticated and existing needs of consumers financial.

The ecosystem in general, banking, fintech and the public sector, collaborates in line with the awareness of the impact and opportunity of appropriation of technologies from the fourth industrial revolution in the development and offer of their products and services.

The openness and strategic will of the institutions of control and regulation in Colombia to promote innovation schemes that deepen the access and use of financial services, as is the case of the supervision Sandbox, always under a scheme of consumer protection and solvency of the financial system.

Based on the above, and even more so at the face of the current crisis, this is one of the most important cluster initiatives due to its transversal nature to contribute to financial inclusion, access to financing alternatives, and the massification of means of payment electronic and, in a timely manner, to local economic development, business formalization and poverty reduction.

The current work plan of the Cluster initiative includes projects and actions framed in the following strategic pillars: regulatory development, inclusion and financial education, human talent, innovation and positioning of the sector. Next, the main advances of the Cluster prior to the Coronavirus crisis were: Definition of public policy guidelines for inclusion and financial education in Bogotá. Diagnosis and action plan to close human talent gaps. Design and implementation of a City Marketing Strategy in which the attributes of Bogotá as a potential Financial Center were incorporated, and which today position the city as the third Fintech Hub in Latin America, after Sao Paulo and Mexico City.

Development, by the Chamber, of a portfolio of 10 specialized (free) business strengthening services to address industry trends: digital transformation, digital marketing, data analytics, financial regulation, among others. In a work between the Software and IT Clusters and Financial Services, actions are promoted to incorporate Artificial Intelligence in technological solutions for the financial sector. At the same time, specific projects and actions were prioritized and have been defined for the “Consumer Finance” segment, a joint business alternative for the Cluster for the actors to develop new business models supported in the exploitation of the data.

Efforts, in the first instance, will be aimed at developing and implementing “cashless microzones” in Bogotá.

Within the framework of these projects and actions, the role of the Chamber in its interest to promote the Cluster of Financial Services of Bogotá-Region, focuses precisely on articulating the leading actors of the local financial ecosystem to work on two fundamental and complementary purposes , particular and special scenario of the financial sector in view of its direct impact on the economic and social development of Bogotá and the country.

The Cluster initiative is today a neutral space to convene dissimilar and complementary actors,

who, excluding their particular interests, identify challenges and challenges to guarantee the desired financial inclusion of the population and effective and equitable access to different sources, as well as alternatives, financing that inject into the economy the resources and liquidity necessary to give sustainability to the local and national productive apparatus.

However, the challenges of the new normal brought about by the pandemic, which will certainly not be short-term, challenge the status quo of the objectives and projects of the Cluster initiative and of the strategies and operations of traditional actors and new players. of the local financial ecosystem.

From a positive connotation of this crisis, the Cluster initiative’s agenda is strengthened in scope and impact, naturally supported by the role that the financial sector is called upon to assume and to face the challenges, not only in the face of the imperative need to guarantee sustainability and soundness of the financial system, but in the shared responsibility to mitigate and be a natural ally of clients, people and companies, to guarantee their financial stability and continuity of their businesses.

Covid-19 is a crisis that forces the different economic sectors to respond immediately, to transform their operational models, to reinvent their businesses and to change their holistic vision of the industry. The financial sector does not escape this reality and, in this sense, the international literature on financial matters proposes different alternatives to face the current state of emergency in the short term and in the medium term, the reactivation of business in a post-crisis scenario of coronavirus. In particular, and analyzing the article “Role of Retail Banks in fighting Covid-19” by Oliver Wyman (April 2020), the strategies suggested to the financial sector to combat the pandemic are highlighted. In summary, Oliver Wyman’s article suggests that, during the health emergency, the next three months, and from then on, the financial sector should be a more leading ally for society in general, and states that it should not only focus efforts and resources on its customers, employees and shareholders. Business continuity plans in the financial sector must focus, transversally and simultaneously, on the ability to satisfactorily serve customers (current and new), not only through the complete transition of its operations and channels to 100 % digital -to eliminate the use of cash-, but to respond and improve its services given the new critical demands of many of its clients.

An example of this type of actions and strategies is the ability to develop Covid 19 Response Centers, as a solution to address the specific needs of customers in the face of the situation. In the second instance, it is essential that the purpose of the actors in the financial sector migrate to full responsibility, which in a postcrisis scenario allows society to highlight the imminent role of the sector in overcoming difficulties. In this context, banks in particular have the opportunity to “go the extra mile” and establish alliances with other sectors that allow them to respond to non-financial needs of your customers. The sector will play a more leading role in the response to financial difficulties, which, in the medium term, depending on the measures of the National Government and the discipline and responsibility of the Colombian population, could worsen drastically.

The degree of economic and social complexity of the pandemic will drive financial institutions to project and address new scenarios, develop and build more agile restructuring capacities and, without a doubt, exploit the use and exploitation of data to minimize barriers to accessing financial solutions. , and automate to the maximum the internal credit processes and other complementary areas. Given this international context, and recognizing the organized effort that the national and local financial sector has been adopting, it is important to share a summary of the measures that are currently being adopted by different players of the Financial Services Cluster and that focuses on the following factors : Linking the different credit solution entities to the preferential lines of Bancoldex (second floor banking) and other reliefs supported by the National Government with significant discounts in rates and favorable conditions for clients. Adoption and extension of terms, grace periods and freezing of credits, to the extent possible, applied to interest and principal reduction or total elimination of costs and commissions of

“The CCB accompanies companies to boost their productivity, their innovation and make use of new technologies. With this, we achieve that the economic development of the region does not stop ”

bank and interbank transfers and increase the minimum amounts for these movements.

Reducing to the maximum the rates related to purchases in industries and sectors mainly affected by the crisis or validating the possibility of extending the benefit to all industries during it. Enabling dedicated and effective channels that allows companies and clients to renegotiate the conditions of the obligations according to the particularities of each case.

No impact on the credit risk rating of customers and companies affected by the crisis. Design and structuring of packages and customized, specialized and diversified credit products, according to the needs of different clients and companies.

Responsibility with suppliers: reduce payment times to a maximum of five days for all your suppliers. It is noteworthy that in the face of these measures, a representative number of financial entities are leading their adoption and implementation, as is the case of the Grupo Aval banks, Bancolombia, Davivienda, Scotiabank Colpatria and BBVA Colombia, banks that cut off to October 2019, according to the Financial Superintendency of Colombia, report an overdue portfolio at the national level with microenterprise clients worth $ 777 billion, equivalent to 64% of the entire overdue portfolio in this segment. The above is added to a package of relevant measures that the National Government and some territorial entities, such as the case of Bogotá, have been leading and promoting to generate better conditions in the environment that guarantee greater liquidity and resources in the economy and facilitate, especially for micro and small businesses, access to financing alternatives that accompany and allow the continuity of their businesses. It is time for the local and national financial sector to step forward and demonstrate their maturity, their status as organizations with purpose and become vital players to overcome the crisis and cope with and accompany the economic reactivation of nations.

We invite you to think positively in the face of this situation and that the crisis prompts us to rethink ourselves so that from the Financial Services Cluster of Bogotá-Region, the country’s financial services and the different sectors of our national economy, we assume the term “Covid “, as a positive and hopeful message that “Colombia Vive Digital”.

“The CCB accompanies companies to boost their productivity, their innovation and make use of new technologies. With this, we achieve that the economic development of the region does not stop.”

REFERENCIA is a fintech that specializes in providing Point of Sale loans, with highly convenient digital solutions for both merchants and end consumers.

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