Global nonprofit Accion announced a $15 million investment from the Accion Digital Transformation Fund in Colombian rural microfinance bank Banco Contact. The investment aims to support Banco Contactar to leverage digital technologies to better serve underserved rural customers across the country.
This latest investment from the $152.5 million Accion Digital Transformation Fund further builds on Accion’s experience supporting banks and finance companies around the world to connect millions of people and small businesses to the digital economy.
Colombia boasts a sizeable rural population with twenty percent of the country’s 52 million people living in rural areas, where farming, processing, and microbusinesses are major sources of income. Approximately 75% of Banco Contactar’s clients work in agriculture and associated industries, where costs and revenue fluctuate significantly throughout the year, and 50% of them are women. These groups are among the most vulnerable to economic and climate shocks and are largely excluded from the formal financial sector.
Banco Contactar’s microfinance model combines technology products and human touch from a network of loan officers, serving rural customers through branches and digital platforms. The Bank’s ongoing digital transformation is speeding up services for its clients, enabling them to access the services they need and make faster and more informed business decisions.
With the majority of its clients working in agriculture and associated industries, Banco Contactar provides training to increase clients’ preparedness for climate shocks and an alert system for when extreme events happen. It is also working to develop other innovative products to help increase clients’ resilience in the face of the climate change.
Banco Contact remains a significant provider of job opportunities in rural areas, with 65% of its employees coming from Colombia’s agricultural heartlands.
Adelina Dasso, Partner, Latin America, Accion Digital Transformation, said: “Rural communities across Colombia are typically served poorly by the financial system, but Banco Contactar helps them to better manage their money throughout the year. Banco Contactar’s rural roots and innovative digital services enable their clients to access specialized financial expertise where and when they need it, so they can focus on running their businesses. With our funding and strategic support, Banco Contactar aims to continue its digital transformation, equipping many more people with access to digital savings, insurance, and credit, to protect and grow their businesses.”
Paulo Emilio Rivas Ortiz, Banco Contactar’s president, emphasized: “It is an honor to partner with the Accion Digital Transformation Fund to drive financial inclusion in the country’s most remote regions, reaffirming our commitment to the mission entrusted to us by Corporación Contactar, our principal shareholder. We thank the law firms Gómez-Pinzón and Philippi Prietocarrizosa Ferrero Du & Uría (PPU), along with Solidus Capital in its role as Investment Bank, for their support on this journey, allowing us to carry out this investment successfully and thereby strengthen the connections of progress we create for the benefit of our clients and their families, boosting Colombia’s economy.”
