Bayport Secures $150 Million USD To Fuel Its Colombian Consumer Payroll Lending

Bayport Colombia, a “libranza” (payroll loan) company, executed a secured credit agreement for up to USD $150 million with a syndicate consisting of a Cerberus Capital Management affiliate, JPMorgan Chase Bank, and a large Canadian institutional investor. The syndicate was led by JP Morgan.

“After a rigorous audit process, we demonstrated the company’s financial strength and reached this agreement, which will help us to leverage the growth we want to achieve during the next two years and continue to provide resources for Colombians to make their dreams come true,” stated Lilián Perea, Bayport Colombia’s CEO.

Founded in 2001 in South Africa, Bayport grants payroll loans to public sector pensioners and employees. Bayport has found its market in countries with development potential such as Colombia, where it arrived eight years ago.

• • The resources will be used to provide loans for pensioners and employees of the armed forces and the education sector.
  • Bayport has operated in the country for eight years, with 30 offices in 23 cities.
  • Bayport’s debt portfolio in the country amounts to COP $800 billion and markets to 94% of the population.

“We have been in Colombia since 2011 and have offices in 23 cities of the country, allowing us to cover 94% of the population. Today, with a debt portfolio exceeding $800 billion pesos, we are proud to announce that have reached 60,000 customers,” stated  Perea.

Bayport has an international presence in 9 countries: Botswana, Ghana, Mozambique, South Africa, Tanzania, Uganda, and Zambia, Mexico and Colombia.

According to Superfinanciera, Colombia’s Superintendency of Finance, Colombia’s libranzas, or payroll loans’ portfolio which represents 36% of the consumer debt portfolio, has increased 10% on average per year during the last 3 years. In this same period, Bayport has achieved an annual growth exceeding 37% on average.

“Worldwide, today we serve over 500,000 clients, supported by 2,500 employees and 7,500 consultants. In Colombia, we have more than 60,000 customers and 500 employees nationwide. Our challenge is to continue to grow profitably and sustainably, affording our clients the opportunity to fulfill their dreams,” said Perea.

Who are Bayport customers?

The banking sector in Colombia has focused on low-risk clients, because 78% of the payroll loans it disburses are to people with “Acierta” scores (assigned by Experian) above 700. These clients’ characteristics include good financial behavior, timely payments, and no over-indebtedness, allowing them access to lower rates.

Bayport’s clients, on the other hand, are not served by the banking sector and their “Acierta” scores are below 700, signaling credit behaviors such as late payments and arrearage that need to be improved. This has led them to be subject to higher rates by the banking sector or denied access completely to financial products.

According to company figures, 68% of its 60,000 clients are men and 32% women. Also, 31% are over 65 years old, 44% are between 36 and 65 years old and, 24% are under 35 years of age.

Per sector, 55% of Bayport’s clients are pensioners, 32% members of the armed forces, 5% work with education, and the remaining 7% work in other fields.

What do Bayport’s Colombian customers use the credit for?

For the last two years, Bayport has also measured the destinations of the money lent to its clients. The measurement shows important results in housing, health, and education, in line with the company’s mission.

“Our goal is to continue to accelerate our growth, allowing us to reach the goal of becoming the largest non-banking company in the country in the long term, delivering opportunities to our clients; to maintain our Great Place To Work seal, granted by GPTW, and to continue to provide profitability to our investors,” added Perea.