Venmetro is a Panamanian platform for on-line loaning which main objective is to facilitate the loaning process thanks to a reduction of costs technology that allows the enterprise a better adjustment to the clients´ profiles. Venmetro expects to give better interest rates than the rest of the financial institutions, as well as a softer reimbursing process through the direct discount from the user´s pay checks.
Venmetro is a good example of the great development the Panama startups ecosystem is experimenting in the last years. The Panamanian startups have a fundamental approach in innovation and, the most important, they have a global way of thinking that is allowing getting into other markets and having access to more important investment rounds. All the specialists in startups point out that this expansive way of thinking is essential for obtaining faster growing and viability guarantee in an ecosystem characterized by the high percentage of failures. Venmetro was elected in 2017 as one of the ten most promising Latin American startups in the financial sector. In this interview, we analyze with its Chief Executive Officer, Dan Pinchasi, the history of this fintech that has made a revolution in the world of online loaning from Panama.
Venmetro is an online credit platform that offers the clients an automatized process guaranteeing efficiency and service through all the credit period. How did the idea to create the startup appear?
The idea came up because of the personal experience that I had with the financial service industry in Panama, where I had to personally visit the office several times to verify the financial status and I had to wait in the line. After doing our research we analyzed that a loaning reimbursing process in Panama could take a month, only to give the clients a response. Here is where we saw the opportunity to create the automatized system, where the clients could request a loaning on line, connecting themselves to the Internet as the only requisite.
How does Venmetro work and what is its business model?
Venmetro offers personal loaning in between $500 to $25,000 for a five-year period. Our interest rates start with 8% a year. The monthly payments of the loaning are done by direct discounts with the loaners´ enterprises. We are not only different from the traditional loaners because of our strong requesting on-line process, but also because we can offer different loaning terms depending on the applicant´s profile in an automatic way. This is a great competitive advantage for us because instead of rejecting the loaners who do not qualify the minimal bank requisite, we offer them loaning periods which allow them starting a credit profile or improve their credits record. We help them to increase their financial income in our country and we continue focusing on that.
Another difference that we have in respect to the traditional loaners is that our process of decision making for loaning subscription takes data into consideration that go further than their APC (Panamanian Credit Association) users´ profiles. Our algorithm considers individual criteria, employment, socio-economy, payment ability and others.
You belong to the “fintech” sector that is going through a remarkable growth in Latin America. What do you think the increase of demanding new services and products in the financial sector is given for?
For those who do, I believe that the tendency and the fintech “hype” sector, came to stay, or better said, it will go on growing. Simply, because this is what the market wants and needs. One of the benefits of the Fintech sector is the increasing of the financial inclusion within the underdeveloped market; which means that the citizens, who had no access to the traditional bank world, are now able to reach financial products, in terms of loaning, payment methods, etc. Another advantage fintech has above traditional financial services is our approach in one specific financial product; instead of trying to develop ourselves in different financial products and “setting our territory” by opening new offices to serve our clients, we focus on improving our main service by means of new technologies and methodologies and on becoming greater using different strategies. As we know, there is a large un-banked population in Latin America, and even the banked population is unattended in terms of products, efficiency, and client service. Here is where fintech steps in.
Vanmetro was elected as one of the most promising startups within the financial sector in Latin America. What did this recognition mean for you?
It was an honor to be included within the most promising startups in the region, especially because we were the only Panamanian company there. I think that being elected after six months of work (we started in September 2016), validated our concept test and problem solving.
What are the most important challenges you have faced since you founded the startup?
The regulatory frame in the financial industry in Panama is probably a burden we found. Loaners in Panama have to request a loaning license approved by the Ministry of Industries and Trade. Once they have their license, it will be under MICI and Bank Superintendence supervision. This supervision is excellent, because it gives hints on how and what to do/ or not, however, it also limits part of the creative aspects that enterprises from other countries or markets do not process. I would also say that trusting the market is a key to achieve success. Ironically, we are the ones who loan the money, and at first, we used to receive a lot of comments questioning our legitimacy. But, as Panama is a small country and mouth-to-mouth commercialization is the most efficient way to trade, we were soon facing that challenge.
Do you believe in Panama to become a hub in the startup field and companies within “fintech”?
Besides being one of the fastest growing economies in the region and being politically and economically stable, Panama is a logistical hub (sea and airport), financial services, and consultancy, among others. There are some fiscal and corporative benefits for the big companies there and it has one of the best corporations in the world installing new regional offices in Panama. So, answering your question, yes, it may and it should be the center in the fintech world. Included within the members of PanaFintech, we have only identified less than a dozen fintech companies in Panama so far.
Because our small population and the retarded insertion in the digital world, in terms of numbers of enterprises, it would be very difficult to compete versus Mexico and Colombia, which are really in conversations to create “fintech” legislations. However, to give Panama a realistic turn into a “hub” of Fintech”, I believe there should be needed a great effort from the corporative and governmental perspective, motivating more the present-day local Fintech companies and the new fintech startups from abroad so they join the panorama.
What is next to deal with in the field of financial technology? What are the main future challenges?
The adoption of new methodologies on the part of the population from a cultural point of view is definitely a challenge. Technology is changing really fast, while our cultural behavior tends to keep in a comfortable rhythm. If we do not adapt these new technologies to our daily routines, there will be other countries which would really do. This will lead to a decrease of job offers, retardation of economic growing. That is why, it is essential to educate the population offering new technologies and processes that show them that these changes improve their daily lives, instead of affecting them in a negative way.
How important is it for the development of Panama, as a technological hub, the celebration of events such as Cybertech Panama? What conclusions do you make from your participation in this event?
Cybertech is one of most prestigious events in cyber security all around the world. It is a great honor that Panama has been selected as their position in Latin America. It validates our strategic importance to connect the Latin American region with the rest of the world. The Conference was held in a successful way in the City of Knowledge during the last two years. We proudly participated in the event with our stand and also in a panel to promote the Panamanian startups abroad. There participated many assistants from all over the region and we cannot wait for the coming edition for a promising content.
How do you evaluate the undertaking ecosystem in Panama?
It is growing fast. The youngest generation´s interest is somewhat promising for the Panamanian future. The City of knowledge is a marvelous institution to accelerate the startups ecosystem´s new players, I believe that there is still much space to make the ecosystem of the country grow in terms of accelerators, funds, conferences, incubators, etc.
Which are five suggestions you should pass to other startups?
- Keep focused on your objective/ vision.
- Make sure to evaluate the market before beginning to construct anything.
- Put together a great team and take care of the team´s culture.
- Listen to your users; what you think, couldn´t be true for your clients.
- During the difficult moments, go back a step and see what caused it.