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What is the situation of fintech customers and entrepreneurs?

In Latin America there are 703 financial technology companies (fintech) that are serving 41.3% of the unbanked customers.

The data shows that this type of solutions are called to support financial inclusion and transform the industry.

These certainties have been part of the reasons why Panama was the headquarters of the 2019 Fintech World Challenge, a program that since December 2018 was developed in the country at the initiative of the City of Knowledge Foundation (CDS), in partnership with the IE Business School of Spain, the National Secretariat of Science, Technology and Innovation (Senacyt) and Banistmo, and last week had its final competition in the Global Demo Day Day Fintech World Challenge 2019.

About the function of sandbox

Alessandro Francolini, business manager of the City of Knowledge Foundation (CDS), explained that for the first time Panama receives an event of this category and, in the case of CDS, it is fundamental, because although the draft Law for the Modernization of the International Financial System of Panama is paused, the idea is for the institution to function as the sandbox or the sandbox where companies can do their tests, under the supervision of regulatory bodies.

To the final round of the competition (which was opened to initiatives of any country in need of mentoring and seed capital) spent 10 startups, under the premise of achieving unique solutions, applicable to the Panamanian market, with a certain level or a viable minimum product, in favor of financial inclusion or with contributions for public entities or private companies.

Some entrepreneurs to keep an eye on

Felipe Echandi (Panama) with how much payment took the first place. The second was for MiBolsillo by Cynthia Villar (Peru) and the third for Carlos López (Mexico) with Moyo AI.

The winners received $ 15,000 in cash and will participate in the South Summit Peace Alliance 2019, a platform that will allow them to generate business opportunities.

Echandi, whose payment company is called Pago Pago and is also a co-founder of PanaFintech, explained that given the new reality of social commerce (sales through social networks) they are giving support to process payments.

Currently they have 600 registered customers on the platform. They started in January 2019 in Panama and are already operating in El Salvador, Costa Rica and Ecuador.

How much Pago managed to raise in a round of financing in Silicon Valley (United States), $ 1.6 million.

Echandi explained that Panama has around six active fintech and, if the payment processors are added, they are close to 10 financial technology companies that respond to different business models.

With regard to the modernization of the Panamanian financial system, he said that the Law, in view of the delay, must be updated. In fact, Mexico, Colombia and Brazil already have their own instruments.

It is necessary to open institutions and understand that Panamanian startups are willing to collaborate with entities”, he said.

Diego Fernando Ponce, vice president of Innovation and Digital Transformation at Banistmo, acknowledged that the lack of openness in the financial sector has hindered the development of fintech in Panama. However, progressively, they are already part of the banking business.

González Paniza clarified that financial inclusion does not only consist of having access to a savings account. There are six “ingredients” that make inclusion possible: Financial education; products designed according to the needs of the client; delivery channels or technology that guarantees financial products; credit bureaus with alternative models; customer protection and a solid regulatory framework.

Support for the entrepreneur

With respect to the other two winning developments, Cynthia Villar (Peru) presented the Mibolsillo.pe platform that seeks to work the integral financial health of the entrepreneur.

He pointed out that in Latin America, 80% of entrepreneurs are informal and 70% do not record their daily transactions, which makes it difficult for them to access the loan.

In three years of operation, they have managed to raise more than $ 100,000 in seed capital and 72% of their users have achieved savings goals. On the horizon, they hope to reach five million customers.

Carlos López (Mexico) with his Moyo AI development, generates a credit score that offers a comprehensive view of the client.

In addition to traditional data, they integrate values, attitudes, culture, prejudices and desires, with the help of psychometric tests and Artificial Intelligence (AI).

They started in 2010 and have evaluated a million people, achieving 17% growth of new clients in the credit entities that have relied on this other way of looking at those who know that a loan makes a difference in the growth of their deal.


Also published on Medium.

Published inFintech
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