IFC Injects $150m into Nubank to Boost Operations, Access in Colombia

By Adedapo Adesanya

In its first investment in a digital bank in Latin America and the Caribbean, the International Finance Corporation (IFC) has granted a $150 million loan to Nubank to strengthen its presence in Colombia.

The 3-year local currency loan will be used to boost the growth of Nubank’s local operations and expand access to financial services in the country.

Lack of access to formal financial services is a major challenge to economic growth in Colombia. Digital transformation can provide new opportunities to improve financial inclusion and increase productivity across the country’s population, especially among women and minority groups.

With the new loan, it will aim to increase access to payment systems for Colombians, in addition to promoting greater competition in the industry in favour of consumers.

The loan is aligned with Nubank’s strategy of becoming Colombia’s leading digital financial services company and promoting access to 100 per cent digital financial services that are more efficient, inclusive, and easy to use.

With more than 400,000 cards issued in the last 10 months, Nu Colombia, a subsidiary of Nubank, is the fastest-growing credit card issuer in the country, with clients in all departments and nearly 80 per cent of municipalities.

Speaking on this, Mr David Vélez, CEO and founder of Nubank, said, “We are very proud that an institution like IFC has trusted us to continue generating a positive impact in Latin America.

“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.”

IFC’s Managing Director Mr Makhtar Diop, added, “Our loan to Nubank means more Colombians will have access to more and better financial services.

“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.”