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Avista secures $22.5M in debt to lend to the elderly in Colombia

Colombian fintech Avista raised $22.5 million in debt to boost lending to the elderly in South America.

This month, the fintech – one of the few exclusively focused on the “silver economy” – announced it had secured a loan facility from Accial Capital, a fund typically focused on fintech lenders in emerging markets.

Founded in 2019, Avista caters to clients in rural areas and smaller-sized cities in Colombia. They claim they market loans to citizens without formal banking records and Colombians with outstanding debt at banking institutions.

The company mitigates risk by ensuring the borrower collects a pension or a monthly wage. Repayments can be deducted from the pension allowance or payroll. In general, payroll lending constitutes a safer lending segment when compared to unsecured loans such as credit cards.

Expand the portfolio

The company has said that the new funding would allow it to expand its portfolio, with the goal of $100 million in loans this year. Most of them should go to the retiree population, the company stated.

“This debt financing for $22.5 million will help us in our mission to improve the financial inclusion of the elderly, bringing liquidity to thousands of Colombian families,” Martin Restrepo, co-founder at Avista, said.

Avista logo
Avista offers digital banking products around payroll and pension.

Avista lends to customers of up to 84 years of age, with loans ranging from the equivalent in pesos of $200 to $30,000. But its clientele goes beyond the so-called silver economy. It also lends to police officers and teachers.

“Avista’s approach to extending credit to a generally overlooked segment deepens financial inclusion across Colombia,” Accial Capital said on social media.

Accial is no stranger to LatAm fintechs

The fund is no stranger to Latin American lending fintechs. Recently, it has also announced a $90 million debt financing line for Clara, a Mexican fintech that targets small and medium-sized businesses in the country.

Over the past two years, Accial has invested more than $32.5 million in debt facilities in Avista, including this recently announced debt issuance, co-founder Restrepo told Forbes. Avista reports it has tripled its portfolio from $55 million to $160 million in the past two years. The company hopes to end 2023 with a portfolio of $210 million.

Colombia’s fintech ecosystem has been growing consistently in the past few years. According to the Inter-American Development Bank, it is the third-largest ecosystem in the region. It accounts for 11% of all financial technology companies in the area, with 279. That is up from just 84 in 2017.

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