This is the bank that lends to informal workers only with their ID

José Alejandro Guerrero, president of Banco W, specialized in microfinance, says that The entity’s competition is not the other banks in the financial system, but the gota a gotaand they even have products like ‘Gota Ahorro’, which is a drop by drop but with savings.

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This is an interesting and challenging year for the financial industry in general, and in our case we continue with the fundamental objective of granting credit to natural persons with some productive activity. We do not give credit to a formal person, that is why we specialize in supporting this number of micro-entrepreneurs who today generate 60% of Colombian employment and contribute around 35% of the gross domestic product in Colombia.

It is a very important group to whom we give credit in different lines in working capital, fixed assets, home improvement and with some new products that we have launched such as the credit card, revolving credits, Paga Ahorro or Gota Ahorro, a product in which we have disbursed more than 300,000 operations, which is a drop by drop with savings, but granted by a supervised financial institution.

From $400,000 and the average is about $6 million, there are up to $10 million. These are people we see on the street every day, like street vendors, the small neighborhood store, the ladies who make arepas, the man in the workshop, someone who works at home, people who do not have a balance sheet in the Chamber of Commerce or an income tax return, and we lend them with the ID card what they can pay, not what they need because we would do them a lot of harm, because what would happen is that we would create financial exclusion, the opposite of what our purpose is, which is to create financial inclusion.

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Our business model is very different from that of traditional banking. We go looking for clients with our sales force in predetermined areas. We have branches with their areas of influence marked and they are permanently going around looking for clients, from whom we only ask for their ID as a document.

In the Cauca Valley because that’s where we were born. However, we are in 29 departments and we provide credit in 741 municipalities in Colombia and the second area is Bogotá and we are strong on the coast.

The bank’s portfolio is close to $1.7 trillion, of which $1.4 trillion is pure microcredit. We have a special line for taxi drivers and we also have another line of credit line.

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It is good and has deteriorated, as it is not unrelated to the general situation that credit and the Colombian economy have experienced and it is at 7.6%, which is high, but we see it as a year of transition, and in the last two months we have seen an improvement.

Granting a loan of $400,000 or $20 million costs the same, and I believe that microfinance should handle interest rates like those currently being handled in terms of ceilings in the five modalities that the Government opened last year. This has allowed many people to access credit despite the difficulty. Our loan portfolio totals $1.7 billion and we have 2,500 employees.

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That is to say, if we had consumer or corporate banking, we would do it with 700 or 800 employees, because we are personalized banking, with 1,000 people on the street looking for clients.
The key is to fight against the drop-by-drop system, which offers rates from 20% monthly to 10% daily. Our highest rate is 65%, but annually.