President, Banco WWB
Investment Director, Bamboo Finance
José Alejandro Guerrero Today we have 134 agencies across more than 500 municipalities, and by November of this year we intend to have 140 agencies in 80 additional municipalities. We also have an expansion strategy through our correspondents; currently, we have 18 and we will end the year with 78. It is important to have alternative channels of representation, which we establish in municipalities where we lack offices, by having a counter at a drugstore. These correspondents disburse credit, open savings accounts, or facilitate deposits and withdrawals. This allows us a banking presence at a very low cost.
Bernhard Eikenberg In terms of geography, our focus has in the past been weighted toward Latin America and India, with 55% of our portfolio being invested in Latin America, although we are moving toward a more equitable and a diversified location policy, which includes more of Africa and Southeast Asia, beyond India, in order to have a more balanced currency and country portfolio allocation in place. With regard to sectors, Bamboo Finance is heavily focused on microfinance, or financial inclusion, which represents about 70% of our current portfolio. Healthcare is the second most important sector. The focus for our future investment activity is really centered on the delivery and distribution challenges of essential goods and services to the low income populations in developing countries, which include amongst others financial services, energy, education, or housing in target markets, and we specialize chiefly in innovative distribution models of these essential goods and services.
JAG The idea is to replace the “gota a gota” system for financial products, so people will not have to pay high interest rates when borrowing money. For example, if someone borrows COP1,000,000 through the “gota a gota” model, compared with a loan from our bank, the client would save about COP2,000,000 per year in interest. As you can see, this kind of informal credit is very expensive. People use it because sometimes no bank will support them or give them a loan. What we are doing is trying to understand the client’s needs in order to help them financially. We are a microfinance bank with clients that are micro entrepreneurs, the kind of people that do not earn a steady salary, but rather partake in informal productive economic activity. We want to get to the base of the pyramid with our products and as a bank diversify the risk since all the products are in the same basket. We will be entering the auto credit market, but our main objective is microfinance. We have a 28% presence in Cali, Valle de Cauca, and we are also expanding to other regions of the country.
BE We view ourselves as a pioneer in bringing commercial funding to developing countries. We started here 12 years ago funding microfinance institutions with debt financing, and over our history have funded close to ten institutions in Colombia. Four years ago we invested in the “Fundacion WWB” in Cali , which has by now successfully become Banco WWB in Cali. We have always insisted on the double bottom line, which means to us that financial returns do not compromise social returns and vice versa; they are not mutually exclusive and we have always tried to prove that what is good for your clients is good for your business. We have proven that both are possible, having established a track record, which was key to attracting institutional or mainstream investors to this industry. I think that one of the key elements to success has been to design products having a proprietary insight into where the market is headed and designing products to meet the needs of the market and risk appetite of investors.
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