María Inés, customer of Banco Contactar, on her farm in southern Colombia — María Inés Eraso diversified her farm in Buesaquillo, Colombia, using a loan from Banco Contactar to plant flowers and leeks in addition to onions

Strengthening communities in rural Colombia through digital transformation

Why we invested in Banco Contactar, a microfinance bank offering microloans, insurance, and deposit products to rural and underserved microentrepreneurs in Colombia

AUTHOR

Adelina Dasso

Colombia’s biodiverse rural terrain is home to nearly 20 percent of the country’s population of over 50 million people. From coffee farming to livestock rearing, agriculture dominates the rural economy. Yet rural communities often face barriers to accessing financing needed to strengthen farms and agricultural businesses, with fewer than 30 percent of microenterprises in rural areas having access to formal financial services. As a newly transformed rural microfinance bank, Banco Contactar S.A. is poised to change this narrative by bringing financial services and digital tools to underserved communities across Colombia.

Accion Digital Transformation Fund has committed $15 million in equity-linked investment to accelerate Banco Contactar’s journey, enabling the bank to expand its reach to women and underserved microentrepreneurs, digitize its operations, and help its clients navigate economic challenges and climate risks. We’re proud to support Banco Contactar as they:

Expand financial inclusion in rural Colombia

Banco Contactar, originally operating as a nonprofit, transitioned to a regulated bank in March 2024. With 98 branches serving more than 140,000 clients — 72 percent of whom reside in rural areas — Banco Contactar is Colombia’s largest private rural microfinance bank. They provide microloans averaging $1,000, along with insurance and deposit products.

Banco Contactar aims to grow its client base to over 245,000 by 2028, ensuring that underserved microentrepreneurs have access to the financial services they need to support their businesses and improve their livelihoods.

Support women entrepreneurs and rural communities

Accion is a member of 2X Global, a leading network driving change in the finance industry by promoting gender-smart investments, aiming to advance opportunities for women, build capacity in gender-lens investing, and ultimately unlock capital for businesses led by and serving women. Banco Contactar’s mission aligns with 2X Challenge criteria, as women constitute 50 percent of its clients and 54 percent of its workforce. Building on this progress, Accion Digital Transformation is working with Banco Contactar to increase representation of women in leadership positions at the board of directors. To address this gap, Banco Contactar plans to develop a gender strategy to increase women’s representation at the top management levels.

By empowering women entrepreneurs and promoting gender equity, Banco Contactar aims to foster financial resilience within rural communities, helping women-led enterprises thrive in the formal economy.

María’s story

María Inés Eraso has built a life deeply rooted in the land of Buesaquillo in southwestern Colombia. As the head of her household and a single mother, she shares her home with her daughter, two grandchildren, brother, and nephew. Despite living in a region marked by violence, she has instilled in her family a deep respect for the land that has sustained them for generations. Farming has always been part of her life, a tradition passed down from her mother.

For years, María Inés struggled with the challenges of running her farm, where she primarily grows onions. Limited access to financing made it difficult to expand production on her small one-hectare plot, as she doesn’t meet the requirements of most traditional financial institutions due to her lack of collateral and credit history. The unpredictability of crop prices further complicated her efforts, making it challenging to generate a stable income.

Everything changed when she discovered Banco Contactar. Seeking an opportunity to grow her business, María Inés applied for her first loan of $307 in December 2023. Since then, she has taken out four loans, each one helping her gradually expand her business. By April 2024, she had borrowed $931, followed by $977 in August, and $568 in November. With each loan, her borrowing capacity has grown, reflecting her successful repayment history and increasing confidence in managing her farm’s finances.

“Thanks to them, I have moved forward, been able to work, and have my own things.”

Because of Banco Contactar’s support, María Inés has been able to invest directly into her farm. She now grows leeks in addition to spring onions, adapting to market changes to ensure a steady livelihood. She has also diversified her activities by planting flowers and raising chickens to supplement her income. She takes great pride in managing her loans responsibly and understanding the importance of maintaining a strong credit history. Most importantly, she has created a sustainable future for her family, providing her daughter and grandchildren with better opportunities.

María Inés remains grateful for the doors that Banco Contactar has opened for her, saying, “I really do appreciate them a lot. Thanks to them, I have moved forward, been able to work, and have my own things. I used to have a small house, and now I have a big one.” Beyond financial assistance, she values the guidance she has received from the Banco Contactar team, helping her make informed decisions about her farm. Her journey is a testament to how responsible financial solutions can empower individuals to overcome barriers, achieve stability, and build lasting prosperity.

Leverage digital transformation for greater impact

Banco Contactar’s model combines both digital products and human touch from their network of loan officers and rural branches, and further investment in digital transformation enables them to continue improving services for clients. Banco Contactar is at the forefront of innovation in rural microfinance, having implemented a digital transformation roadmap in 2023. Co-developed by Banco Contactar and Accion Advisory, the digital roadmap included the adoption of a new core banking system, the introduction of digital savings products, and the integration of digital tools into its lending processes. With a strong digital strategy, Banco Contactar plans to increase digital transaction channels to 70 percent by 2028.

Accion Digital Transformation’s investment supports Banco Contactar’s ambitious plan to further digitize its operations, optimize efficiencies, and connect clients to the broader financial ecosystem. By leveraging data-driven insights and advanced digital tools, the bank will improve service delivery and enable greater financial access for underserved populations.

Show resilience in the face of challenges

Operating in a volatile economic environment, Banco Contactar has demonstrated resilience, maintaining better credit quality than its peers. Moreover, it protects over 65 percent of its loan portfolio with government guarantees, mitigating risks during economic downturns.

The bank’s innovative approach to climate risks further exemplifies its commitment to sustainability. By providing climate alerts, training, tailored products and exploring parametric insurance for its agricultural clients, Banco Contactar is helping rural entrepreneurs adapt to climate-related challenges and safeguard their future.

Banco Contactar embodies the transformative potential of rural microfinance in Colombia. Accion Digital Transformation is proud to support a financial institution that fosters economic growth, gender equality, and climate resilience in underserved regions. Together, we aim to create a future where every entrepreneur, regardless of location or gender, has the tools and resources to succeed.