Contxto – Colombian fintech Finsocial received some serious financing from major Wall Street Bank, Morgan Stanley this week. We’re talking about around US$125 million in structured financing. One installment for US$75 million followed by a second for up to US$50 million.
Finsocial must use the loan to garner more credit lines to its users.
This is the largest financing package ever received by an unregulated fintech in Colombia.
Related article: Mercado Credito receives biggest-ever loan to fintech in Mexico from Goldman Sachs—US$125 million
Finsocial loans and investment assets
CEO Santiago Botero began work on Finsocial in 2012. The fintech provides loans to public school teachers and people affiliated to a number of Colombian pension funds. It’s stated to have 21,000 customers in a market of 1.5 million potential clients. It also offers debt investments.
Besides Morgan Stanley, there are reports floating around that another US$40 to US$80 million are on its way to the fintech. It may come in the form of equity, however, we’ll just have to wait and see.
It’s also worth noting that the fintech still isn’t regulated by the Colombian Superintendence, an overseeing government body. But it plans to change that soon.
In the medium term, the fintech may consider becoming a fully-operating bank.
The bigger picture?
While this all sounds fine and dandy. There’s something bigger going on.
Goldman Sachs, earlier this month made a major loan to Mercado Credito in Mexico. Moreover, it was the largest amount ever financed to a fintech in Mexico. It was for—US$125 million.
I shan’t suggest there’s an Illuminati conspiracy theory going on.
Rather, it just seems like a little healthy competition between these two gargantuan investment banks. Interesting to note that even as they play their game of thrones to rack up their stock price, fintechs in Latin America benefit.
At least by getting more visibility and the financial bulk to expand their offerings.