IFC loan to boost Nubank’s subsidiary in Colombia
Brazil-based Nubank, one of the largest neobanks in the world, will boost its footprint in Colombia with a three-year loan of up to USD 150 million from the International Finance Corporation (IFC). This is the first investment by IFC, the World Bank Group’s private-sector arm, in a digital bank in Latin America and the Caribbean.
“This loan reflects confidence in our business model, the solidity of our operation, and the contributions we are bringing to Colombia’s financial inclusion, a country with low financial services penetration and high use of cash,” said David Vélez, CEO and Colombian co-founder of Nubank, in a press release.
“Greater financial inclusion is a must for economic growth, and digital banking will play a key role in meeting the needs of underbanked and unbanked retail customers. This investment aims to both address those needs and to catalyze further investment in the financial sector in Colombia and the region,” IFC’s managing director Makhtar Diop said.
In Colombia, cash accounts for 70 to 85 percent of all transactions, and credit card access is still low.
When it launched in February 2021 in partnership with Mastercard, Nu Colombia’s credit card had a 250,000-long waiting list. The idea was to first test the product on a randomly selected group of 3,000 clients, then gradually expand this number while adding new features specially designed for Colombians.
With more than 439,000 cards now issued, Nu Colombia claims to be the fastest-growing credit card issuer in the country. Nubank’s holding, which encompasses operations in Brazil, Mexico, and Colombia, closed Q3 2022 with more than 70 million customers.
In August last year, Nu Colombia was granted a finance company license. With it, Nu Colombia can expand its current offering of a credit card plus an e-wallet to a full savings account linked to other types of credit products — a move similar to that made by its Mexican counterpart last November.
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