Bayport currently holds a portfolio of $1.3 billion in Colombia and aims to utilize this new capital to broaden its reach and provide more accessible credit solutions. The agreement is reportedly supported by the FNG, which provides guarantees to facilitate credit access within Colombia.

Lilian Perea, CEO of Bayport Colombia, stated that the funding agreement reflects market confidence in Bayport’s operations and its commitment to financial inclusion. Perea also acknowledged the support of BBVA, the FNG, and Equilibrio Capital for their assistance in securing the guarantee with FNG.

BBVA Colombia’s Vice President of Business and Governance, Sergio Lizarazo, noted that this operation aligns with BBVA’s commitment to promoting financial inclusion. BBVA states that it aims to support companies like Bayport that are working to provide financial resources to underserved populations.

The allocated resources will be directed toward originating loans designed to empower Colombians financially, offering capital for various purposes, including entrepreneurship, home improvements, education, and healthcare. Bayport will prioritize individuals traditionally excluded from the financial system due to a lack of credit history or previous reporting to credit bureaus.

Bayport focuses on providing payroll loans to pensioners, public sector employees, and members of the military and police. The company also offers financial education resources through its website and social media channels.

Photo of Lilian Perea provided courtesy of Bayport Colombia.

The collaboration between Bayport and Citibank began in 2022, and the increased credit facility marks a significant milestone in their relationship. Bayport plans to use the additional funding to continue its growth in the non-bank lending market, where it currently manages a portfolio exceeding 1.3 trillion pesos and serves over 170,000 clients.

Lilian Perea, CEO of Bayport Colombia, emphasized that the expanded credit facility with Citibank reflects the company’s sustained growth and solid financial management. “This renewed trust will allow us to advance our mission of promoting financial inclusion, particularly in communities underserved by traditional banks,” said Perea.

David Castillo, Head of Financial Institutions at Citi Colombia, highlighted Citi’s ongoing support for Bayport’s growth strategy, particularly in reaching underserved populations. “We are excited to continue supporting Bayport as it expands its services to more Colombians,” Castillo noted.

Bayport Colombia focuses on providing accessible credit solutions to pensioners, public sector employees, military personnel, and police, particularly those with limited or no credit history. Through its payroll loans, the company aims to enhance financial inclusion in communities traditionally excluded from mainstream banking. Additionally, Bayport offers financial education resources, including free courses and digital content, to help Colombians make informed financial decisions.

This credit facility expansion aligns with Bayport’s strategy to deepen its impact in the country’s financial sector while continuing to address the needs of underserved communities.

The financing has been divided into two disbursements by Blue Earth Capital, an Swiss-based investment fund that focuses sustainable and impact-oriented financing.

The move aligns with Bayport’s mission to promote greater financial and labor inclusion in the Andean nation, where many remain outside of the traditional banking and credit sector.

“Through this transaction, Bayport Colombia reaffirms its unwavering commitment to financial inclusion and comprehensive support for the diverse financial needs of the Colombian population,” said Lilian Perea, CEO of Bayport Colombia.

“In 2023,” she continued, “we raised more than $120 million USD, strengthening our ability to drive our core purpose: to provide financial solutions that enable our clients to chart a new horizon and a future now. With our sights set on 2024, we remain firm in our vision of continuous growth, reaffirming our dedication to actively contributing to the socioeconomic development of the country.”

Photo: Lilian Perea, CEO of Bayport Colombia. (Credit: Bayport)

Specifically, Bayport Colombia, which has operated since 2011 as a subsidiary of Mauritius-based Bayport Management Ltd., announced that it will use the funding to “provide greater financing opportunities to Colombians, focusing on improving their quality of life in terms of access to better health, education, housing, and micro-enterprises.”

Colombia represents a significant part of Bayport Management’s portfolio. The company primarily operates in Africa, with its Mexican subsidiary being the only other branch outside of its home continent.

“Through this investment we will continue to promote greater opportunities for entrepreneurship and the building of a new credit history for those who have a low credit score or who have been reported in credit bureaus, in accordance with our highest standards in corporate governance, policies and procedures in the origination of loans, as well as best practices in the selection of payables and collections, and in customer protection,” said Lilian Perea, CEO of Bayport Colombia, in a statement.

Bayport Colombia currently claims leadership of Colombia’s non-bank payroll lending market in Colombia with 30% market share. Called Libranzas, the loans are offered through employers and paid off through payroll deductions.

” Bayport has set high standards in terms of corporate governance, policies and procedures in the origination of payroll loans and best practices in the selection of payers and collections. With a significant growth in the recent years, our initiatives promote financial well-being, generating greater entrepreneurial opportunities in the country.  We are excited that this transaction with Nomura will allow us to continue with our mission,” says Lilian Perea (above), CEO of Bayport Colombia.

“Despite the economic outlook for 2023, we will remain faithful to our higher purpose of improving the living conditions and development opportunities of Colombians through payroll loans. We have always been very optimistic, and we hope to continue opening doors to new and better possibilities.”

A subsidiary of South Africa based Bayport, the company has been operating in Colombia since 2011 and claims to have more than 68,000 payroll loan customers among its market focus of public employees and pensioners. In Colombia the company has a 1.1 trillion-peso loan portfolio and operates 17 offices across 15 cities. Globally, Bayport says it serves half a million borrowers in México, Colombia, Botswana, Ghana, Mozambique, South Africa, Tanzania, Uganda and Zambia.

The secured resources will be used to grant loans to workers, retirees, and members of the country’s armed forces, who according to Bayport, have had a difficult time obtaining access to bank financing.

Payroll-based consumer lending is known as Libranzas in Colombia

Elizabeth Rey, Corporate & Investment Banking Head for Citi Colombia told Finance Colombia that “Citi conducted extensive due diligence efforts over Bayport’s business, including among others, the assessment of its corporate governance standards, its credit profile, loan portfolio, and growth prospects, evidencing on the company’s stand as a relevant player in Colombia’s payroll loan industry and its contribution to financial inclusion locally.”

“We continue to explore various options to achieve, in the second half of the year, the double-digit growth of our portfolio estimated in 2022.  We decided to prioritize financing with Citibank Colombia given the size of the financing opportunity and the optimal conditions they offer us,” says Lilian Perea (above photo), CEO of Bayport Colombia.

“Achieving this financial transaction closing with Citibank Colombia allows us to secure sufficient resources to continue providing opportunities to those Colombians who do not have access to bank loans due to their low credit score, which prevents them from progressing and improving their quality of life. That is why we work hard to achieve financial democratization and seek alliances with organizations in which we share the vision of promoting progress in emerging economies like ours, to ensure access to credit lines tailored to the needs of Colombians so that they can move forward, transform their lives and achieve their dreams,” says Perea.

“For over a century of operations, Citi Colombia has been a trusted partner for its clients, connecting financial institutions, multinationals, national companies and governments through our unparalleled global network. For more than 100 years we have worked hard to be a bridge for investors willing to bet on this country’s future, as well as for Colombian entrepreneurs looking to internationalize their businesses. Citi has a clear vision of its role in ensuring this stability, contributing to the country’s economic recovery, and closing the gaps in Colombian society. We know that Colombia offers excellent investment opportunities, both in traditional segments and new avenues for growth that have great potential for the country’s entrepreneurial and technological talent, natural resources and biodiversity, and strategic geographic position, concluded Rey.

Bayport Colombia initiated operations in Colombia in 2011, and now claims 65,000 borrowers with 1.1 billion pesos in loans. This gives Bayport 30% of the non-bank consumer lender market in the country, with 17 branches in 15 cities.

Bayport Management was formed in South Africa to offer simple credit alternatives to those who lack access to bank financing. Globally, Bayport serves half a million borrowers in Botswana, Ghana, Mozambique, South Africa, Tanzania, Uganda, Zambia, Mexico and Colombia.

The resources will be used to grant credit opportunities through payroll lending, called Libranzas in Colombia, to pensioners and public sector employees who, due to reports in credit bureaus, cannot access the banking sector.

The US Government’s International Development Finance Corporation (DFC) partners with the private sector to finance solutions to the most critical challenges facing the developing world today.

According to Pablo Montesano, CEO of Bayport Latin America, securing DFC’s line of credit is a historic achievement, given the impact it will have on the business and its beneficiaries: “We enable our clients to take control of their financial well-being in the short and long term. term. With this additional funding, we can reach more people, positively influencing individuals, families, communities and even national economies.”

Bayport Colombia S.A. has maintained a profitable position for the last 5 years, while steadily increasing the size of its loan portfolio.

“As a company we have excellent financial health and the support of headquarters to operate in the Colombian market. We have maintained a profitable position, generating profits and value for our shareholders since 2016, closing 2020 with a capitalization ratio of 17.3%,” said Lilian Perea (above), CEO of Bayport Colombia.

“This has led us to have agreements such as with the DFC, that allow us to continue delivering financial inclusion and the possibility of fulfilling dreams to a sector of the population that is marginalized from the banking system,” she added.

Bayport Colombia S.A. offers financial solutions through payroll instruments, by entering into collaborative agreements with government institutions, which provides liquidity to the employees of said entities.

“Incofin is a company focused on investing in countries with emerging economies, driven by the desire to promote inclusive growth. This is why we closed this agreement as an alliance to promote that objective, now that our operation is aligned with a sector of people who are typically marginalized by their risk,” said Lilian Perea, CEO of Bayport Colombia.

According to Bayport, these resources are vital at this juncture to offer credit to people involved in agriculture, entrepreneurship, the education of their children, even family emergencies, but because of low or negative credit ratings, do not have access to the banking sector.

Worldwide, Bayport serves more than half a million customers in 9 countries: Botswana, Ghana, Mozambique, South Africa, Tanzania, Uganda, Zambia, Mexico and Colombia.

“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.