Accion, a non-profit organization, announced this week a $15 million investment in Banco Contactar, a Colombian microfinance institution with an emphasis on rural areas, through its Accion Digital Transformation Fund, which aims to help Banco Contactar adapt digital technologies to improve service to underserved rural clients in the country.
By 2022, microcredit entities made more than 2 million disbursements, amounting to $13.48 billion in Colombia.
The country has a significant rural population: 20% of its 52 million inhabitants live in rural areas, where agriculture, the processing of raw materials, and microenterprises are the main sources of income.
Approximately 75% of Banco Contactar’s clients work in the countryside and related sectors, where costs and incomes vary throughout the year. In addition, 50% of these clients are women, a group vulnerable to economic and climatic shocks, who are frequently excluded from the formal financial system, according to the bank’s data.
In terms of the model, the organization combines technological products with personalized advice through a network of advisors, who serve its clients both in commercial offices and on digital platforms.
Given that many of its clients are engaged in agriculture, the microcredit company has an early warning system to prepare them for natural events and develops innovative products to increase the resilience of its clients in the face of climate change.
“Rural communities in Colombia often receive little support from the financial system, but Banco Contactar supports them effectively. The bank’s rural roots and its digital services enable its customers to access financial expertise where and when they need it, so they can focus on growing their businesses,” said Adelina Dasso, Latin America Partner at Accion Digital Transformation.
With the investment, Accion Digital Transformation Fund, a fund with portfolio size of $152.5 million, continues to contribute to its goal of supporting banks and financial companies around the world by connecting millions of people and small businesses to the digital economy.
Emilio Rivas Ortiz, President of Banco Contactar, concluded by saying that with this investment they will continue to strengthen technological processes to expand the portfolio of products and services.
“With these resources, we will be able to continue improving our technological processes to offer broader and better quality financial services to historically underserved communities,” Rivas specified.
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