FINPYME Forum makes a forceful call for banking innovation and announces next event to be held in Mexico
- More than 400 representatives of financial institutions, private enterprises, public sector entities, and academic and civil society institutions from 42 countries participated
- SMEs say alternative financing methods have helped them continue growing
- Under an agreement with Nafinsa, IIC to hold next FINPYME Forum event in Mexico
Medellin, Colombia, September 23, 2015 — The small and medium-sized enterprises (SMEs) of Latin America and the Caribbean have made a loud call for banking innovation this week as they continue to face barriers to accessing financing.
The panels at FINPYME Forum revealed the harsh reality SMEs face when they seek loans from the financial sector and how financial technology (FinTech) companies and the new models of the banking industry can help meet this need.
“We are seeing a technology revolution that promises to transform the industry. But banks and FinTech companies can work together, each offering what the other lacks. In many cases, FinTech companies don’t compete with banks but rather complement them,” said Carl Muñana, the general manager of the Inter-American Investment Corporation (IIC).
At the event, a number of FinTech companies from all over the world offered live demonstrations on how to perform credit analysis, request loans in seconds, and how banks can be advised on obtaining more information on their clients.
Alejandro Consentino, from Afluenta, explained that one of the advantages offered by FinTech companies is speed. “It takes us 17 seconds to approve a loan, which for a bank could take five days,” he said. “This speed is what has enabled FinTech companies to grow quickly. They’ve attracted US$12 billion in investment in 2014 and are projected to attract US$60 billion in 2015.”
Against this backdrop, the traditional banking sector has heard the call of the region’s SMEs and has expressed interest in meeting the needs of business owners and advancing with nitiatives to support development and innovation; collaborating on different models and new technology is a challenge the industry needs to face in order to survive.
Thus, some of the presentations were given by institutions that have begun incorporating education (Santander) and innovation (Citi) in order to deliver products that truly aid the development of SMEs.
“If banks don’t change and we aren’t humble, then within a few years we’ll cease to exist,” said Santiago Pérez, Bancolombia’s vice president for personal and SME banking as he called on the industry to take action.
At the close of the event, the IIC announced that it had reached an agreement with Nacional Financiera (Nafinsa) to hold the next FINPYME Forum in Mexico.
The major conclusions of the event, which took place over two days in Medellín, were that clients must receive a quicker response, digital systems must be set up, and the industry must adapt to the needs of Millennials, the new generation of young people that will represent 50% of the banking sector’s clients in the next five years.
“We are very happy to have brought together more than 400 individuals from around the world at this event and to see that the region’s financial industry is truly interested in integrating new technologies that better fit the needs of SMEs,” said Greg Da Re, chief of the IIC Strategy and Innovation Division.
About the IIC
The IIC, a member of the Inter-American Development Bank (IDB) Group, promotes private-sector development in Latin America and the Caribbean with a focus on SMEs. The Corporation provides companies with financing in the form of equity investments, loans, and guarantees, as well as with innovative technical assistance, advisory services, and knowledge products. In 2014, the IIC approved 64 operations totaling $426.3 million. Since its inception, the IIC has approved more than 920 loan and equity investments for SMEs and financial intermediaries, for a total of US$5.63 billion. An additional $3.7 billion has been mobilized through cofinancing and syndication agreements. For additional information on the IIC’s activities, visit www.iic.org.
Nafinsa is a development bank focused on training SMEs and providing economic support with the help of Mexico’s federal government.
Contact: Francisco Rojo
Telephone: +1 (202) 623-8120