MICROCAPITAL BRIEF: IDB Buys $3m Equity Stake in Digital Lender, Payments Provider Moni of Argentina

IDB Invest, the private sector arm of the Inter-American Development Bank (IDB) Group, recently invested USD 3 million in Moni Online, a financial technology (fintech) firm whose app allows users – who are primarily in Mexico and Argentina – to pay bills as well as apply for and receive loans with terms up to 30 days. The deal, which is IDB Invest’s first investment in a fintech company, reflects the investor’s belief that fintech can be “highly scalable in countries with low banking penetration and high penetration of mobile services.”

Founded in 2013, Moni is based in Buenos Aires, Argentina. The company describes its work as “building a hub connecting the current banking, payment and credit provisioning systems to new technologies such as cryptocurrencies.” Its platform is fully digital, with loan applications and other services requiring “no paperwork or phone calls.”

In addition to the immediate investment, the agreement includes an option for IDB Invest to purchase another stake for USD 2 million during Moni’s next round of equity financing. The sizes of the stakes have not been disclosed, but IDB Invest’s current shareholding is described as a minority position. In 2014, Moni received its first external investment, which was in the amount of USD 1 million. As of 2018, its minority stakeholders include the World Bank Group’s International Finance Corporation (IFC), individual investor Federico Pirzio-Biroli and Argentina-based venture firm NXTP Labs.

Headquartered in the city of Washington, IDB Group serves Latin America and the Caribbean through four members: IDB, IDB Invest, the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund (MIF).

IDB is a development finance institution that was founded in 1959 and has 48 member countries, including 26 countries located in Latin America and the Caribbean. It works with governments, companies and NGOs to finance sectors such as financial services, health, education, renewable energy, transportation and telecommunications for the promotion of “social inclusion and inequality, productivity and innovation, and economic integration.” It also provides technical assistance and research in these areas. During 2017, IDB disbursed loans totaling USD 10 billion and had USD 89 billion in loans outstanding.

IDB Invest is a US-based financial institution specializing in debt and equity financing for small and medium-sized enterprises (SMEs) and other private-sector projects in Latin America and the Caribbean. The institution provides consulting services and “finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region.” During 2017, it executed 234 loans, guarantees and other contracts valued at a total of USD 3.2 billion. As of 2018, its portfolio is valued at USD 11.2 billion and spans 23 countries.

IIC provides financial and advisory services to SMEs, financial service providers, corporations and government-backed enterprises. As of March 2018, IIC reported quarterly loan disbursements of USD 101 million and outstanding loans of USD 1 billion.

MIF invests in microfinance funds, venture capital funds and projects that support SMEs. During 2017, MIF launched 36 projects costing a total of USD 24 million.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

IDB Press Release
https://www.iadb.org/en/news/idb-invest-invests-5-million-moni-online-its-first-operation-fintech-company

Moni Services
https://moni.com.ar/adelantos/

IDB Group financials
https://publications.iadb.org/bitstream/handle/11319/8824/Inter-American-Development-Bank-Annual-Report-2017-The-Year-in-Review.pdf?sequence=1&isAllowed=y

IDB Invest background
http://www.idbinvest.org/page/about-us/

Boss Magazine: “Twelve on Fire: Global Fintech StartUps to Watch”
https://thebossmagazine.com/fintech-startups/

NXTP Labs
https://www.nxtplabs.com

MicroCapital article; April 2, 2018: Latin American Agribusiness Development Corporation (LAAD) Borrowing $45m from IDB for SMEs in Farming Value Chains, Improving Impact Measurement, https://www.microcapital.org/microcapital-brief-latin-american-agribusiness-development-corporation-laad-borrowing-45m-idb-smes-farming-value-chains-improving-impact-measurement/

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