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Movii partners with Yabx to launch loans for MSMEs

Colombia based mobile wallet, and challenger bank Movii has announced that the FinTech has partnered with Yabx, a technology company in contactless lending to provide credit services for MSMEs. The credit service can be used by businesses to facilitate their business operations and purchase FMCG stocks.

One of the biggest problems today being faced by MSMEs in developing markets is the lack of access to credit for working capital, payables, equipment/asset purchase, etc. According to IFC, the Colombian MSMEs face a financing gap of USD 56 bn which is considered a significant impediment to its economic growth potential. The primary reason for this lack of credit access is that most of the MSMEs are still outside the financial institutional framework because of the cumbersome and expensive nature of the processes for traditional banks.

Yabx by creating a credible financial identity for unbanked & underbanked based on alternate data for credit underwriting, and managing loans end-to-end on a digital platform assists in bringing down the cost of service delivery significantly. Its platform supports all access channels like mobile apps, SMS, USSD, IVR, customer service phone call session, etc.

The new contactless service is launched considering the COVID-19 pandemic situation in Colombia and is expected to help businesses with pre-approved credit facilities to purchase their retail stock and cater to the needs of the general population amid lockdown. The partnership is being launched in the country with Procter & Gamble, a global consumer goods company whose product lines include personal care & hygiene, food & beverages, etc. which are in high demand considering the current situation.

“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,” said Rajat Dayal, Founder & Chief Executive Officer of Yabx.

The service is intended to help merchant as they get credit in a wholly digital manner without the need of doing any paperwork, thus ensuring quick money availability and removing the need for physical visits to bank facilities. P&G merchants in Colombia can pay for their stock orders using digital credit from their Movii wallet. The 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 the merchant onboarding, credit disbursal, and collections would be enabled using Yabx digital lending platform.

“This move at the time of COVID-19 crisis is an important step towards our efforts to bring digital financial services to the underbanked population in Colombia of which MSMEs constitute a significant portion. We are planning to roll out this loan 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,” said Hernando Rubio, Chief Executive Officer and Founder of Movii.

Incubated by Comviva, Yabx is a part of the $21 billion Mahindra Group. The FinTech aims at simplifying financial access to over two billion unbanked customers and MSMEs in the emerging markets of Latin America, Africa, and Asia, and Latin America.

Founded in 2017, Movii is a Fintech company providing a digital platform that operates under the model of Specialized Society in Electronic Payments (Sedpe). It offers an app and a debit card for customers to manage and use their money. The merchant arm of Movii provides merchants with a suite of product lines, including mobile recharge, bill payments,digital content, transportation service, P2P transfers, etc. According to company data, the company has reached over 500,000 customers and over 50,000 merchants.

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