The project

About the issuer            

General information:

• Borrower:                                                       COOPAC KORI
• Countries of operations:                               Peru
• Head office:                                                   Calle Alvarez Thomas N° 539, Arequipa
• Website:                                                          https://kori.pe/
• Date of incorporation/Founded:                   16 Feb, 2013 
• # of employees:                                              500+

Project terms

• Currency:                                                         EUR
• Amount:                                                           162,750
• Maturity:                                                          18 months
• Grace Period:                                                 n.a.                      
• Interest rate:                                                  4.50 % p.a.
   

Documentation

Information document of the issuer 

Information note of the issuer (for Belgium investors)

Summary

COOPAC Kori is a savings and lending cooperative that started operations in Arequipa (Peru) in 2013 and is active in the regions of Lima and Arequipa. Kori offers individual and group loans to the MSME sector, where the group loans (named SUMAQ WARMI) are offered to female entrepreneurs that will have to form a group, where the group acts as a guarantor and the individual loans are offered to MSMEs with a stable business and a financing need to increase their working capital or invest in productive assets. Kori is regulated by the Superintendence in Peru and provides savings and takes deposits. 

Mission

We are a formal financial institution, with a focus on financial inclusion, which seeks the progress of people with criteria of efficiency that allows sustainable growth.

Vision

To be agents of change to become the national benchmark for financial inclusion.

Use of Proceeds / Loan purpose

The project for the amount of EUR 162,750 will be destined for the placement of credits which I proceed to detail:

• The financing will be destined to women from peri-urban areas of the city of Lima as working capital.
• The benefited members belong to the type of microenterprise product of the commerce sector.
• The total number of benefited members will be 800 with an average disbursed balance of 1,000 soles (USD 250)
• The total of groups are approximately 60

More information about #of entrepreneurs reached, sectors, type of loans & impact:

172,545. That's how many women entrepreneurs Lendahand's new portfolio company Kori has supported to grow so far. Cooperative Kori, based in Peru, focuses on the financial growth of people who have their own businesses and offers group loans for women entrepreneurs. 

Sumaq Warmi 

Lendahand is proud to add Kori as an investment opportunity to the platform. Specifically their product Sumaq Warmi, Quechuan (an indiginous language in Peru) for Wonderful Woman, which represents Kori's primary focus. To allow female entrepreneurs to grow their business. Mainly active in the informal labor sector, Peruvian women lack access to the financial system. Kori brings borrowers together by offering group loans and goes the extra mile to motivate them to empower each other by organizing encounters and group activities. Since Covid-19, the women send each other introduction videos and hold online group meetings.

Spurring small businesses

Entrepreneurship offers the surest path to prosperity in many parts of the world, but people living in remote areas - especially women - often lack access to business training. Kori accompanies their borrowers, having a business analyst guiding them to open both a bank and savings account.

According to the Peruvian government, 1.5 million micro and small enterprises throughout the country are led by women. Most of these female entrepreneurs started out of necessity; since their salary is not enough, they are unemployed or decided to look for a new step in their career. Previously, we wrote how the world's GDP would grow if more women participated in the labor force and which barriers they face. These obstacles are no different in Peru. Women are still more likely than men to hold the primary responsibility of unpaid work and caregiving within the home. They spend close to 40 hours per week on unpaid household activities, keeping them from economic advancement. Another barrier they continue to face, which is similar throughout the globe, is the lack of financing options. Through initiatives such as Sumaq Warmi, Kori enables opportunities for women and their families to keep growing.

The next generation

Compared to the 49% global labor force participation rate of women, Peru surpasses that average with 69%. Peruvian women are also intricately linked to our global economy and can break down barriers for women worldwide. By taking a step toward building and growing their businesses - be it formal or informal, small or medium - and getting access to funding, they empower the next generation of women in their country to do the same.

COVID-19 Update

The management team has taken the following measures:

• Kori had a covid 19 policy and mitigation plan
• Kori was marked as an essential service, but loan officers initially did not go out to the field, to protect their safety from the high number of CV-19 cases in Peru, which affected both disbursements as well as collections.
• Disbursements were almost zero but restarted in Oct-2020 and are continuing to pick up
• Kori showed the ability to efficiently cut admin costs
• Because of CV-19, Kori has implemented a strong digitalization of its services through the introduction of a new customer app and the strengthening of internal digital infrastructure. While the essential business model has not changed, the operations have been adapted to the new systems. The group loans have seen a significant change as groups are now able to meet online. Even contracts will be signed digitally (through voice recordings), after the regulator allowed for digital signatures.
• Kori decided to temporarily ask for a higher deposit for group loans to mitigate the credit risk

Management team

Kori has a 9-headed management team, out of which the majority has experience at the main competitor Financiera CREAR, before being taken over by Compartamos in 2011. Javier Valencia (CEO ) has 20+ years’ experience in the Peruvian MFI sector and founded Kori in 2013. Yeffri Mora (Commercial Director) has 13 years’ experience in group credit accumulated at Financiera CREAR between 2007-2012, and Kori since 2013. José Alocilla (CFO) worked for large banks and a textile company, before joining Financiera CREAR in 2007. Moved to Kori in 2019. Fernando Revollar (COO) moved to Kori in 2017 from Financiera CREAR after spending more than 10 years there.

Management

JAVIER ERNESTO VALENCIA NUÑEZ. CEO. Master’s in quality management, specialisation in strategic management of the human factor at the Peruvian University of Applied Sciences and Economics at the Catholic University of Santa María de Arequipa. He also taught at the Peruvian Institute of Business Administration. Currently he is the CEO of the Cooperativa de Ahorro y Crédito (Savings and loans cooperative) Kori, for which he was president of the advisory board. He has over 30 years of work experience in Companies: Finance Crear where he was an executive and CEO for 13 years, ASOMIF, ONG Hábitat, Franky Ricky SA, SOMECSA and Banco Industrial del Perú. 16

JOSÉ ALOCILLA. CFO. MBA at the Pontificia Universidad Católica del Perú, Industrial Engineer at the Universidad Nacional de San Agustín de Arequipa. He has taught maths and statistics at the Instituto del Sur de Arequipa. Currently he is Central administration Manager at the Cooperativa de Ahorro y Crédito Kori and he has more than 35 years of work experience in companies like Compartamos Financiera, Franky Ricky SA and Banco Industrial del Perú.

FERNANDO REVOLLAR. COO. Has a master’s in software engineering from la Universidad Nacional de San Agustín de Arequipa and completed systems engineering at la Universidad Católica de Santa María de Arequipa. Currently he is COO at la Cooperativa de Ahorro y Crédito Kori. In his career of over 13 years, he was Head of IT Development and Architecture and IT Project Coordinator for Compartamos Financiera and senior development analyst for TRANSALTISA S.A.

About the Operating Country

The roots of microfinance in Peru originated in the 1950s, but private-sector microfinance began to experience rapid growth in the 1990s when the industry was bolstered by a new policy framework of economic liberalization. In 2017, the Peruvian MFI industry GLP was USD 12bn, counting 44 regulated MFIs with 4,9m active borrowers (see 2017 global comparison on the right-hand side, source: Mix Market)

Today, Peru is widely considered to have one of the best regulatory and legal environments for microfinance in the world, ranking second overall in the 2019 Microscope (The Economist IU). Much of Peru’s success in microfinance lies in the prudent regulation and strict supervision, balanced with limited government intervention. The Peruvian regulatory body (SBS) does not impose interest rate caps, allows for Foreign Direct Investments and maintains strict credit reporting requirements.

Between 2006 and 2014, the Peruvian MFI market underwent a period of strong consolidation with 11 large M&As led by large commercial banks. Increased competition and consolidation meant that costs to the borrower decreased significantly (from c.50% EAR to c.20%), but also product offering was diversified. The acquisition of Financiera Creditos Arequipa by Banco Compartamos– Mexican MFI, largest in LatAm – in 2011, led to the birth of COOPAC KORI, a young MFI that is specialized in group loans to female entrepreneurs, led by former Financiera Creditos Arequipa managers.