A loan of EUR 250,000 will enable BWISE to launch its Payment Facilitator model in Colombia and Ecuador (a feature that will enable small retail companies to receive digital contactless payments without the need of acquiring a card reader).
About the issuer’s group
Borrower: SOLUCIONES MOVILES DEL ECUADOR (“BWISE”)
Country of operations: Ecuador
Head office: Quito, Ecuador
Date of incorporation: 2006
# of employees: 80
Maturity: 24 months, quarterly and linearly amortizing
Grace Period: 3 months, first repayment after 6 months
Interest rate payments: quarterly (except the first repayment after 3 months)
Interest rate: 4.75% p.a.
Security: Yes, 1.2x collateralization ratio (first lien charge and pari passu with co-investor Alphamundi)
BWISE is a leading fintech platform company that recognizes merchants at the Bottom of the Pyramid (“BOP”) as resilient agents of economic importance, empowering micro, small and medium enterprises (“MSMEs”) to build sustainable businesses and promote financial inclusion and socio-economic development through our technology solutions. We take pride in our ability to strengthen merchants by giving them the ability to sell essential digital products through mobile commerce solutions and our ability to integrate these merchants to value chains with mobile payment solutions including mPOS and Supply Chain Finance (“SCF”). The Company has two main business lines: (1) Mobile Commerce and (2) Mobile Payments. Majority of the merchants are women-owned Mom & Pop businesses.
Under the Mobile Commerce vertical, BWISE enables 50,000+ MSMEs to commercialize a wide range of digital products, from prepaid phone minutes and data, media, and micro-insurance policies to utility bill payments. Through BWISE, large corporations are able to reach the BOP by “sachet” sizing their offerings to affordable, small bite size increments that fit the consumption budget of the average BOP family. The ability to have access to these basic necessities are critical for the BOP to keep pace and survive in the post-COVID 19 new normal of remote work, school and entertainment. BWISE’s network of merchants reach 1.7 million monthly consumers that sit at the BOP.
Via the Mobile Payments vertical, BWISE enables 15K merchants to receive digital payments via a mobile point of sale (mPOS). Our MSMEs have seen their revenues grow up to 30% once they began accepting card payments with our solution. The Company provides an affordable mPOS to these MSMEs while traditional acquirers target large retailers with a much more expensive solution. Following the rapid adoption of mPOS, BWISE developed the Supply Chain Finance application (“SCF”), which enables banks and FMCGs (fast moving consumer goods companies) to financially include and better integrate the MSMEs into the supply chain. By being integrated to financial institutions and the ERP system of the FMCGs, the SCF app enables real-time reconciliation of deliveries, inventory, receivables and collections for the FMCGs and the ability for the MSMEs to pay with credit/debit card, cash, direct debit to its bank account or access to a working capital line. In this project we are working with Banco Pichincha, the largest bank in the country, as the financial institution and FMCGs like Coca-Cola and Tesalia. The aggregation and analysis of data from these transactions will help establish credit and transactional data which will enable the value chain to provide additional financial and product solutions and efficiencies that will better serve the BOP.
Allow MSMEs to grow sustainably through the use of digital commerce and payment solutions, enabling their financial inclusion.
To pave the road to an inclusive economy.
A loan of EUR 250,000 will enable BWISE to launch its Payment Facilitator model in Colombia and Ecuador. This model is characterized by attending underserved markets with a unique value proposition and innovative technology. Under this model, BWISE expects to onboard 150.000 merchants in the next 5 years in both countries, boosting their financial inclusion.
As stated above, BWISE has two main lines of business: Mobile Commerce and Mobile Payments. Under Mobile Commerce, mobile network operators (MNOs) such as Telefónica, Claro, CNT pay BWISE a 5% average commission per sale or top-up of phone minutes via its network of MSMEs. BWISE shares half of this commission with the MSMEs. The significance of telecommunications for consumers provides a strong visibility of cash flows as revenues come from established and leading companies like Telefónica (AAA local debt rating) and El Rosado (AAA local debt rating). Our 15-year history of revenues from the sale or top-up of cellphone minutes is more important than projections of future revenues from this business. These revenues or commissions, coming from MNOs, will be paid directly to a Trust account for the benefit of lenders, including Lendahand. Regarding Mobile Payments, BWISE’s earns revenues in the form of monthly fees per mPOS user and transaction fees with its Supply Chain Finance (SCF) product. These recurring fees, paid by Banco Pichincha (SCF product) and Telefónica (mPOS product), also provide an important recurring flow of revenue.
To maintain a solid relationship with its network of 50K+ stores, BWISE’s salesforce conducts weekly visits to every merchant to assess their needs and deliver new products. The Company’s salespeople have cultivated long-lasting relationships with these merchants. The channels used to enable MSMEs to access our platform are web via computer, app via smartphone and text via basic phone.
- Mobile Commerce
- E-top Up (Prepaid Cellphone minutes/data, TV, media)
- Basic Utility Payments (300+ services to collect payments)
- Tangibles (SIM Cards, Smartphones, Accessories)
- Mobile Payments
- Mobile Point of Sale (mPOS): converts a smartphone into a payment terminal
- Supply Chain Finance: allows MSMEs to pay their suppliers (Coca-Cola) via multiple payment methods like cash, direct debit, check, cards or microloans.
The customer segment we attend is Bottom of the Pyramid MSMEs, particularly M&P stores. The bottom of the pyramid in Ecuador totals approximately 10 million people. In this country, by 2018, there were 895K MSMEs (micro, small and medium enterprises), which combined to generate $47 billion in annual sales and employed 60% of the working population. This segment represents approximately 47% of the country’s GDP. 90% of the population purchase their groceries from this segment, particularly at the 200K M&P stores throughout the country.
Currently, BWISE has a network of 50K merchants using our Mobile Commerce services, which account for approximately 25%-30% of the market. These stores—majority women-owned—serve 1.7 million end clients (approximately 17% of Ecuador’s BOP population) on a monthly basis. Additionally, the Company provides its mPOS technology to 15K users in Ecuador and Venezuela.
- 2 million monthly transactions (e-top up and basic utilities)
- USD 81 million annual turnover
- 3 million monthly transactions (mPOS Ecuador & Venezuela)
- USD 100 million annual turnover
On a national level, COVID-19 hindered Ecuador’s economy decreasing its GDP by 7,8%. The Central Bank of Ecuador expects the economy to recuperate and grow 3,1% in 2021.
We strongly believe that with the damage that COVID-19 has inflicted on the BOP population, BWISE has played and continues to play a critical role in enabling the bottom of the pyramid to rebuild and not fall further into poverty. By allowing merchants to sell a wide range of products, communication products among them, the Company’s platform is a reliable source of income for each merchant. BWISE is focused on a) making affordable essential digital products that enable remote work/learning and promoting contactless payments (eliminating the need for physical contact); and b) play a leading role with technology to enable government agencies and financial institutions to financially include the BOP. On a positive note, COVID-19 has augmented the need for digital contactless payments, making our mPOS solution indispensable for the future. Despite a challenging 2020, BWISE’s network of merchants grew 25% year-over-year.
The founding team consists of four members: Alberto Sandoval (VP Mobile Payments), Carlos Saenz (VP Mobile Commerce), Mauricio Bayas (VP Technology and Innovation) and Javier Brauer (Director).
- Alberto has wide management experience, amongst others as the CEO of NCR/MACOSA, BellSouth Ecuador and Telefonica Ecuador. During his time at NCR/MACOSA, he was leading the project to develop COBIS (Cooperative Open Banking Information System), a core banking system that has been adopted by 70 banks in 13 countries. Alberto holds an MBA (Cum Laude) from INCAE Business School, Costa Rica and a BS degree in Industrial Engineering from University of Miami, Coral Gables, FL US.
- Carlos has held important positions in IT and Telecommunications multinational companies, such as General Manager for AT&T GIS in Guatemala, International Marketing and Sales Manager for NCR/MACOSA and CEO for ANDINATEL. Carlos holds an MBA from Instituto Tecnologico de Monterrey, Mexico and a AA degree in Mathematics from Escuela Politecnica del Ejercito, Ecuador.
- Mauricio is an internationally recognized innovator that has lead the development and implementation of several highly successful software applications in different industries. Examples include the development and implementation of Businesswise Mobile Commerce Product Suite in Costa Rica and Ecuador. Mauricio holds an MBA degree from Instituto Tecnologico de Monterrey, Mexico, an Engineering Master Degree from Escuela Politecnica Nacional, Ecuador and a BS degree in Electronics and Telecommunications Engineering (Suma Cum Laude) from Escuela Politecnica Nacional, Ecuador.
- Javier is a reputable professional specialized in project management and entrepreneurship. He led the conceptualization, creation and development of one of the most successful, upscale real estate projects in Ecuador, Arrayanes Country Club. Javier holds a BA degree from Bryant University, Smithfield Rhode Island, US.
Highlights or Awards
Digital Bank Latam (Guayaquil) 2019’s Winner for its mPOS solution
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In Ecuador and Venezuela, SMEs employ around 60% of the working population. The most significant need of these entrepreneurs is access to formal financing. Their main problem is that banks do not usually sanction credit to SMEs because of a lack of collateral and high transaction costs. BWISE gives merchants the tools to create a digital record of transactions and start receiving digital payments, which will enable them to receive formal financial loans. They offer a mobile payment application that enables entrepreneurs to use smartphones with an internet connection as a payment terminal.
Mobile payments are a step towards financial inclusion and enable entrepreneurs to grow their businesses, thus taking steps into reducing poverty.
With this project you are contributing to the following Sustainable Development Goals:
SDG 1 - No Poverty
SDG 8 - Decent work and economic growth
Read more about the impact you can make through our platform and the SDGs on our impact page.
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