Financing will enable Bayport Colombia to scale its existing portfolio and provide credit for home improvements, working capital, education, health, and agricultural expenses
A loan of $15 million from the Inter-American Development Bank's Opportunities for the Majority (OMJ) sector to Bayport Colombia, S.A.S., a non-bank financial intermediary that focuses on rural areas and financial inclusion for families at the base of the socio-economic pyramid (BOP), will provide financing for a variety of needs for low-income populations throughout the country.
The loan will be complemented with up to $35 million that IDB has mobilized from international commercial lenders, which will allow Bayport, a subsidiary of Bayport Management Limited, to scale up the origination of loans to be repaid through payroll deductions by low-income public sector employees and pensioners, half of them located in rural areas and an estimated 57 percent of them women.
Despite important efforts by the Government of Colombia to expand financial inclusion, 95 percent of all consumer lending in the country is located in urban areas, and with only 15 banking branches per 100,000 inhabitants, the penetration of the financial system lags behind that of other middle to high-income countries in the Region.
By offering credit to underserved populations in the form of libranzas, payroll deductions to workers and retirees found eligible through a methodology that follows client protection principles, Bayport Colombia aims to benefit an estimated 110,000 BOP families over the life of the IDB's loan. The company focuses on providing value added services and products, such as alliances with recognized retailers, education and insurance companies to provide clients with quality goods (e.g., construction materials), technical education and life and health micro-insurance.
"One of Bayport’s most attractive features is the commercial penetration it has accomplished through its ´hub and spoke´ model, which is based on a large and highly trained mobile salesforce of over 500 agents linked to local and regional offices," said Opportunities for the Majority Sector Manager Luiz Ros.“Bayport brings its services directly to where its clients are located in 26 of the country’s 32 departments.”
About Opportunities for the Majority
Established by the IDB in 2006, Opportunities for the Majority promotes and finances market-based, sustainable business models that bring together privatecompanies, local governments, and communities in developing and supplying quality products and services to people at the base of the socio-economic pyramid in Latin America and the Caribbean.
- John Ferriter