And they keep coming: Fintech eyeing Colombia banking license

A Colombian fintech is planning to apply for a banking license to operate as a digital player, local paper La República reported.

Finsocial is the latest to announce plans to enter the country’s banking arena.

The company today provides loans to public sector teachers, retirees, independent workers and women entrepreneurs, among others.

In operation for eight years, Finsocial has about 22,000 clients and is present in more than 30 cities.

As of June, the company said its loan portfolio stood at 536bn pesos (US$136mn). Pre-tax profits for August were 3.65bn pesos (US$948,936).

Finsocial CEO Santiago Botero, the paper reported, said the company had the requisite resources to become a bank, had learned how to manage risk and that, prior to requesting a banking license, would bring on board a new partner.

Planned products include a savings account, Visa and Mastercard credit cards and loans. Staff at the fintech’s offices would help educate users in digital banking, Botero said.

Investment banks are seeking banking licenses in Colombia, as are financing companies, electronic deposit and payment platforms and crowdfunding platforms.

The local Gilinski family, behind Banco GNB Sudameris, has said it plans to open the first fully digital bank in Colombia this year, named Lulo Bank, which has already secured a license. 

Elsewhere on the financial services map, Moni, a financial inclusion-focused startup whose investors include IFC and IDB Invest, has expanded into Colombia, offering loans. Brazilian challenger bank Nubank has also arrived, and is preparing to offer a no-fee credit card.

The Colombian government plans to present in the coming months draft legislation known as the payment system and capital markets bill. A key aim of the bill is achieving goals outlined in a 2020-25 financial sector development blueprint recently unveiled and which should help the local fintech and insurtech sectors expand their footprints.