Technology at the service of financial inclusion

The combination of low levels of bancarization and access to credit with high penetration rates of the internet and...

The combination of low levels of bancarization and access to credit with high penetration rates of the internet and smartphones is an attractive for companies that offer alternative digital financial services. Innovative and varied offers make up an expanding ecosystem, which paves the way for the inclusion of those who do not have the necessary requirements to access a traditional loan.

Almost half a century has passed since the then young Bangladeshi economist and future Nobel Peace Prize winner Muhammad Yunu decided to turn his sensitivity and expertise to try to improve the lives of the most neglected in his country. Locked in the vicious circle of the lack of initial capital that forced them to go to lenders usurers, entrepreneurs and artisans could not make the leap that would allow them to cross the threshold of poverty. 

The emblematic case that was installed as a founding rite of a new credit model oriented to the base of the pyramid was that of an artisan of objects made of bamboo cane. With a personal loan of only US $ 27 granted by Yunus himself back in the 70s, the concept of microcredit was informally founded, a model that has expanded in different latitudes and has allowed millions of people to even have the chance to specify projects and improve their quality of life.

Today turned into a profitable business, with iconic countries of development, like India or Brazil , the loan of small amounts of money without the need of almost impossible guarantees and credit history inaccessible for the great part of the population has shown to be an effective instrument to promote financial inclusion .

The exponential advance of technology and the consequent development of fintech – digital companies that provide financial services – has greatly leveraged the microcredit model and differential loan alternatives for unbanked or sub-bankers.

In Argentina, the growth potential of this segment seems to have no tech . A country of medium-high income, with a considerably developed economy, low rates of bancarization (50% of the population, according to the World Bank) and access to credit cards (25%, according to the Argentine Fintech Ecosystem Report), but with High penetration rates of the Internet and smartphones are a promising scenario for companies in the financial sector that operate with non-traditional and 100% digital solutions.

A nourished ecosystem of options

As Mariano Biocca, general coordinator of the Argentine Chamber of Fintech , points out, when targeting an unbanked public or with no credit history, companies in this segment carry out evaluations that include much more complete variables than traditional methods, when defining the granting of loans.

“This not only allows individuals to access personal loans, but, by their behavior, build their own credit history,” he says, “in a country with growing needs for financial inclusion, where credit to the private sector is barely At 14% of the GDP, the fintech development prospects are enormous, which is why projects that also begin to provide users with financial education tools are very welcome, so that savings begin to be daily. ”

To these advantageous conditions for those who have no other way to take loans at reasonable rates, the ease and speed offered by online financial services platforms is added. Transactions usually occur almost in real time and do not require waiting and cumbersome paperwork in banks or financial.

Today, the companies that grant microloans are approximately 40. Some focus exclusively on this type of loans and others offer a variety of innovative alternatives. There are those that connect investors with applicants; those that offer scoring technologies that surpass traditional ones -which allow credit profiles to be generated to those who are excluded from the system- and those who advance salaries or provide larger loans to individuals and SMEs, among other options.

Together, they form an ecosystem that, in full expansion, enhances the country’s progress towards inclusion and financial education; key factors to narrow the gap in access to goods and opportunities, which excludes a large part of the population.

Ixpandit Fintech Factory

Matías Friedberg, co-founder 

This company has a web platform that has three main products: : salary advances in less than 2 minutes, 24/7/365. : instant solution to the riskiest credit profile, the one with unpaid debts or a bad score in the Veraz. : working capital loans to SMEs or monotributistas that uses non-traditional sources of information.

Initial Investment : US $ 500,000, plus subsequent investment rounds.

Target audience Underbanked
customers (with account but without access to the bank’s services).

Number of customers
40,000 among all products.

Be over 18 years old, have a bank account and have a cell phone.

Advances specializes in offering personal loans and salary advances to people who are banked. To apply for a loan, the applicant must enter their personal data in the online form from any device. It is a 100% paper-free operation and is available 7×24. Once approved, the money is deposited in the bank account in 6 seconds. No previous credit history is needed but it builds reputation with use.


Alejandro Cosentino, CEO and founder

It is a collaborative finance platform that connects people who need a loan (applicants) with those who can finance it (investors). Through technology and simple requirements, you can simulate a credit, know what interest rate could be obtained based on the amount, term and credit profile, and request it, with a guarantee of immediate response.
Applicants can access credits from $ 10,000 up to $ 650,000 to 12, 18, 24, 36 or 48 months.
It was born in 2012. Today it has three offices (Buenos Aires, Lima and Mexico City), a community that amounts to 2 million people, and more than 23,500 loans financed in the region.

Initial Investment  : US $ 300,000. The “angel” investment was added to Series A for US $ 2,250,000, followed by Series B, for US $ 9 million contributed by the IFC; Raise Equity, venture capital fund for impact investments; IGNIA, the Mexican investment fund, and P2P GI.

Target audience
The role-based target on the platform varies from people aged 18 to 70, with different socioeconomic levels.

Investor:  average age of 31 years, an average initial investment of $ 16,000; They tend to be single.

Applicant: average age of 40 years, an average declared income of $ 48,000, predominantly single, who request an average credit of $ 55,000 in up to 36 installments.

Number of clients 
Members of the community amount to 1 million, with an amount in loans originated of more than $ 890 million distributed in more than 18,200 credits granted.

Requirements to apply for a credit
Access to a device with an internet connection; be Argentine or resident with DNI, be between 18 and 73 years old; net monthly income above $ 15,000; minimum working age of 6 months; good payment history in the last 2 years.

The applicant indicates the amount of money he wants and the period in which he would be willing to pay it. Investors allocate their money through the auction mode, indicating the amount they want to participate with, from $ 50 to 100% of the total amount requested (according to investor profile) and the rate at which they would be willing to invest. When the total money offered by investors reaches 100% of the amount of credit that the applicant accepted, the individual investments are consolidated into a single loan with their corresponding obligations.


Diego Varela, founding partner

It is a fintech that develops digital solutions for financial inclusion; Its purpose is to facilitate and expand access to consumer loans, entrepreneurs and SMEs. With its digital platform and Score Mobile it registers more than 1000 data points of the user, which allows 50% of the economically active population of the country to be qualified, which today is invisible to the formal financial system. It is positioned as a strategic partner of banks, financial entities and companies interested in expanding its customer base and expanding its business to markets that were not yet developed.

The founders contributed U.S. $ 500,000 in the initial stage (own funds). This year, an agreement was signed with an investment fund from abroad to grow the local operation and scale up the business to Latin America.

Target audience
The proposal is aimed at incorporating people who are not banked and have no credit history in the traditional bureau into the financial system. Through digitalization, their habits, customs of consumption and payment are understood, which allows generating a financial identity with information obtained through the cell phone.

Number of clients
Work with more than 10 entities, granting personal loans and financing their sales.

$ 30 million annually. Through its technology, more than US $ 10 million have been delivered.

The technology offered has a 100% digital onboarding, verification of device and cell line, validation of the DNI, facial recognition and biometrics system, connection with BCRA – CENDEU, AFIP, Renaper and other credit bureaus, immediately. It has a family of algorithms that systematize information on payment habits, consumption, cell phone use, as well as geolocation to validate address, place of work, among others. With these sources, he builds a credit score to evaluate people efficiently, not only because of his blank income but with multiple variables, obtaining a more robust and accurate profile.
The request is delivered in less than 48 hours. Credit application experience via app, individual, private, convenient, fast.

As reported in the Argentine Fintech Ecosystem Report , a classic example of fintech focused on microcredit is Wayni Movil . It is an application for smartphones that allows you to request a microloan by simply creating an account in the app and uploading a photo of the DNI and an invoice for a service in the name of the applicant. The money awarded is withdrawn at the kiosk in the neighborhood, same place where the return will be made later, in the established installments.

“It is one of the few fintechs in the ecosystem that uses extra-banking channels and allows access to loans to a large number of people who are not part of the traditional financial system,” the report said.



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