Hivos-Triodos Fund has provided a venture debt facility in the amount of USD $1,000,000 to Tienda Pago, a leading Latin American fintech company with a focus in microlending. The facility represents a milestone for both institutions; for Tienda Pago, it is the first debt facility by an institutional investor, for Hivos-Triodos Fund, it is the first time financing a fintech company in Latin America.
Tienda Pago provides working capital finance to small stores to purchase key products they procure from consumer goods brands distributors. Tienda Pago has developed a close-loop model in which the credit line to the small stores is activated via mobile phone, allowing big distribution companies to sale on terms to the small stores and collect repayments electronically, thus reducing inefficiencies and operational costs. Small stores benefit by gaining access to formal commercial credit, allowing them to more efficiently manage their inventories, increase their sales and margins, and in many cases create and develop a formal credit history, thus improving their ability to succeed.
Hivos-Triodos Fund aims to promote access to innovative financial services and contribute to the development of sustainable sources of income for entrepreneurs in developing countries. Tienda Pago is a great option for small stores that are looking to solve their working capital needs, a fundamental tool for small entrepreneurs to succeed.
“We are thrilled to welcome Tienda Pago to our investment portfolio in Latin America, a company whose innovative business model is transforming the way in which financial inclusion is achieved. Our financing was structured as a venture debt facility, a product that appropriately takes into consideration the relative early stage of Tienda Pago’s business, while at the same time enabling us to begin building a long-term relationship with the company as they expand their business across the region, serving small store owners,” said Alejandro Solis, Latin America’s Regional Manager for Triodos Investment Management, Emerging Markets.
“At Tienda Pago, we are committed to providing our customers with relevant solutions to meet their business needs and improve their lives. Thanks to the support from Hivos-Triodos Fund, we can reach even more underserved customers in Peru,” said Dan Cohen, founder and CEO of Tienda Pago.
Alexander Golding CFO of Tienda Pago welcomed the agreement with Hivos-Triodos Fund as it constitutes a key milestone in the growth of the company “We’re excited to bring on Hivos-Triodos Fund as our first institutional debt investor. Its commitment to our mission is a great vote of confidence as we continue to scale operations and increase our impact”
Hivos-Triodos Fund joins a world-class impact investor and venture capital group that supports Tienda Pago’s mission to bring technology, financial literacy, and financing to small stores in Latin America. After reaching the 25,000-customer mark in 2018, around 65% of whom are women, Tienda Pago will continue empowering small retailers throughout the region and improving the small retailer landscape in the near future.