Movii, a leading mobile wallet and a challenger bank in Colombia, and Yabx, a leading technology company in contactless lending have joined hands to provide credit services for MSMEs. Businesses can use this credit service to facilitate their business operations and purchase FMCG stocks. This contactless service is introduced considering COVID-19 pandemic situation in the country and will help businesses with pre-approved credit facilities to purchase their retail stock and cater to the needs of general population amid lock down. The partnership is being launched in Colombia with Procter & Gamble, a global consumer goods company whose wide range of product lines include Personal Care & Hygiene, Food and Beverages etc. which are in high demand considering the current situation.
The service helps the merchant as they get credit in a completely digital manner without doing paperwork thus ensuring quick availability of money and removing the need of visiting bank facilities. P&G merchants in Colombia can pay for their stock orders using digital credit from their Movii wallet. These merchants credit limit will be derived using Yabx’s state-of-the-art credit decision analytics engine using advanced machine learning tools. The entire credit journey from onboarding of merchant, credit disbursal and collections would be enabled using Yabx digital lending platform.
Speaking at the launch, Rajat Dayal, Founder & Chief Executive Officer of Yabx said, “Usually these merchants rely heavily on cash to purchase their stock. This comes with a lot of problems such as – lack of sufficient cash availability to optimize sales, security risks and inconvenience of handling cash, lack of liquidity management, continuous alienation from credit ecosystem etc. These problems become even bigger and riskier at the time when the world is facing dreaded COVID-19 pandemic. Yabx aims to help these merchants to access easy and affordable credit and enable them to plan, manage and grow their business more efficiently. Additionally, merchant network owners like P&G, who have a large merchant base in Colombia, can benefit from this program by enhancing their sales volumes, reduction in cash leakage, better planning and stocking as well as improved transparency in the supply chain. In Latin America, which is a special focus region for us, merchant financing is one of the key product to ensure effective management of COVID-19.”
The Chief Executive Officer and Founder of Movii, Hernando Rubio said, “This move at the time of COVID-19 crisis is an important step towards our efforts to bring digital financial services to the under-banked population in Colombia of which MSMEs constitute a significant portion. We are planning to roll out this loans program to our larger merchant network and continue working on building partnerships with more CPG networks. In addition to this, soon we will be launching more credit use-cases for merchants including cash advances, POS loans etc.”
One of the biggest problems facing MSMEs in developing markets today is the lack of access to credit for working capital, payables, equipment/asset purchase etc. According to IFC, Colombian MSMEs face a financing gap of USD 56 Billion which is a major impediment to its economic growth potential. One of the primary reasons for this lack of credit access is that most of these MSMEs are still outside the financial institutional framework, primarily because the processes are too cumbersome and expensive for traditional banks. By innovating on alternate data for credit under-writing and managing loans end-to-end on a digital platform, Yabx is able to bring down the cost of service delivery significantly. Yabx aims to bridge this credit reach gap by partnering with large network players and bringing its global expertise to these developing markets.