CAF Helps Peru Savings Funds Issue Digital Credits

The COVID-19 pandemic accelerated the digitalization of the financial sector, and municipal savings funds are working hard to be at the forefront for the benefit of the most vulnerable population.  CAF—development bank of Latin America—and the Peruvian Federation of Municipal Savings Funds (FEPCMAC) signed a non-refundable technical cooperation agreement to support the analysis of the components required to deploy an end-to-end digital working capital credit facility in municipal savings funds, from the customer’s application to the final disbursement of credits to micro and small enterprises, (MSEs).

Based on their focus on microfinance and their penetration into areas underserved by the financial system, municipal savings funds have recognized the importance of jointly developing a 100% digital credit product that reaches the currently excluded or underserved population more efficiently.

“In this initiative, we combine the microcredit assessing experience of the savings funds with the digital financial innovation that we promote at CAF, in order to advance solutions towards the management of microcredits for working capital that help savings funds operate in the post-pandemic context starting in 2021,” said Manuel Malaret, CAF representative in Peru.

In addition, FEPCMAC president Fernando Ruiz Caro noted that this initiative is part of a digital transformation approach based on the strategy of meeting specific needs of specialized services for MSEs nationwide.

Savings funds in Huancayo, Cusco, Maynas, Paita and Ica will roll out the pilot digital product that will result from the analysis of operational, functional and economical capabilities of these institutions in addition to minimum technical requirements to comply with regulations, safety, biometrics, digital documentation and custody; as well as of social, technological, educational and business barriers to be considered in the design and implementation method of the solution.

CAF’s financial inclusion program promotes the quality of financial products and services, understood as the degree of customer satisfaction with the services offered by the market, in this case microfinance institutions, by supporting the development of innovative financial products and services that focus on the needs of customers.