Swiss impact fund Symbiotics provided US$20m in debt financing to Finsocial, a Colombian consumer lending platform for teachers and pensioners. Finsocial raised US$125m in debt financing from Morgan Stanley in 2019. 

(Contxto) Households across Colombia are scrambling to make ends meet with improvised businesses, pawnshops, and of course, requesting loans. To (hopefully) add some relief on that end, Finsocial got COP$76 billion (~US$20 million) in debt financing.

Swiss Symbiotics procured the funds which will be channeled towards the fintech’s increasingly diverse lending solutions.

Finsocial in 2020

Just last December, Finsocial closed US$125 million in structured financing via Morgan Stanley. The total was to be divided into two installments: one for US$75 million and then a second for up to US$50 million.

But evidently 2020 has shown that even all that money is insufficient for the demand Finsocial is seeing.

The startup has raised additional funding throughout the year, having received a total of COP$40 billion (~US$11 million) in two financing rounds from Bancoldex, a state-owned commercial bank.

Add in these fresh US$20 million, and the fintech now has more mullah to keep serving credit lines for Colombia’s Covid-stricken economy.

Lending by the numbers: The startup reports it’s received loan requests for COP$214 billion (~US$56 million) and approved COP$98 billion (~US$26 million) for over 7,000 customers.

Adding variety to lending

The Colombian startup typically focused on financing solutions for retirees and public school teachers. But more recently it’s been expanding out into new markets.

For one it’s started addressing freelancers and workers who are registered within the social security system. It’s also released a credit line for people with a job but no social security.

This year the fintech launched FinsoTienda as well. This lending solution aims for female entrepreneurs to set up their own business from home. Interestingly, it includes not only the loan, but also a “starter kit” to launch the business which includes an electronic platform for handling sales and inventory.

Finsocial isn’t the only Colombian startup to dive into diversifying its lending products. Medellín-based Sempli has also been expanding its approach to credit lines for SMEs.

For me, this is a sign that the lending fintech scene in Colombia is growing in size and maturity. And it’s a good thing too, as we’re at a time where a simple loan could make or break a business and keep families afloat.