WASHINGTON and PANAMA CITY, Oct. 27 /PRNewswire/ -- IFC, a member of the World Bank Group, invested $3 million and helped mobilize an additional $2 million for Panama's YellowPepper to help the company expand mobile banking and access to financial services in Latin America and the Caribbean region. It is IFC's first equity investment in a mobile banking firm in the region, and it brings total investments in YellowPepper to more than $15 million.
Only about one-third of the population in Latin America and Caribbean has access to formal financial services. But 80 percent have access to mobile phones, which presents a significant opportunity for extending financial services to millions of low-income customers in the region. YellowPepper, by enabling payments to be made and received directly via a mobile phone, can help speed up commerce, facilitate domestic and international remittances, and increase customers' ability to invest in income-generating assets.
Created in 2004, YellowPepper currently offers services in Colombia, Peru, Ecuador, Guatemala, Dominican Republic, Bolivia, Haiti and Panama. It has more than two million active users. The company is developing a clearinghouse for mobile payments, allowing mobile subscribers, retailers, billers, consumers and banks to interact on a common platform using the mobile phone. IFC's equity investment will help YellowPepper further develop its product and expand its services to new markets in the countries it serves.
"Our goal is to bring the banking system to the masses via the mobile phone," said Serge Elkiner, President and Founder of YellowPepper. "Because of the enormity of the task, we sought out an investor whose reputation and approach complement our strategy. IFC fits this profile perfectly. It is also one of the largest investors in electronic payments and mobile banking in the world, contributing invaluable insight and experience to innovations happening worldwide."
Roberto Albisetti, IFC Country Manager for Mexico and Central America, said: "In the rapidly changing world of mobile banking, YellowPepper has managed to differentiate itself from the competition and develop a business model that is unique. It allows simple and secure access to financial services for mobile phone users, facilitating commerce—particularly for the unbanked and rural populations."
Kent Lupberger, who leads IFC's investments in Technology, Media and Telecom, said: "Access to financial services is key to enabling full participation in the formal economy. Mobile banking is one of the most promising areas for extending these services to underserved populations."
IFC invests in innovative payment processors and mobile money operators in emerging markets. It also advises clients on strategies and products focused on inclusive businesses. IFC investments in the electronic and mobile payments sector have helped provide services to more than 15 million customers in Asia, Africa and Latin America.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit www.ifc.org.
SOURCE International Finance Corporation