“Partnerships need shared vision, purpose”
By Monica De Leon
Efraín Forero Fonseca is the President of Davivienda bank, based in Colombia, and a prominent figure in the financial sector in Latin America and the Caribbean. He has made his career in Grupo Bolívar, the umbrella group under which Davivienda belongs, with a successful business model that promotes the development of the countries in which it operates.
Last May, U.S. Vice President Kamala Harris helped launch a call to action to the private sector to boost investments in the Northern Triangle area of Central America—El Salvador, Guatemala, and Honduras. The initiative aims to promote economic development, leveraging private and public resources as well as partnerships with multilateral development banks. This commitment included 12 companies. One of them was Davivienda, an IFC client.
In this interview, edited for length and clarity, Forero talks about the importance of partnerships in spurring more private sector investment in Central America.
Q: You have a strong track record in forging partnerships throughout your career. Do you recall your first partnership?
A: Since the beginning of my career, a little more than 40 years ago, in Grupo Bolívar, I have always relied on teamwork and alliances. I remember when I first started working in the insurance company that was part of the group. I was eager to find synergies between the work done by the different institutions within the group in order to come up with solutions with much greater added value to our clients. This is an increasingly relevant approach in our organization and has become a competitive attribute of Grupo Bolívar.
Q: What kind of partnerships have been successful in increasing financial inclusion, and how have those partnerships helped you make an even greater impact?
A: Davivienda's purpose of being able to reach the most vulnerable groups has always been catalyzed by strategic alliances. Many years ago, we understood that we, from a strategic point of view, needed to develop skills to be able to partner with third parties to have a much greater impact, meet our objectives, and serve our customers better.
In the last 10 years, we have been working in alliance with technology and innovation companies in California, Singapore, China, London, Spain, and India. For example, by partnering with Pay Key, an Israeli company, we became the first institution in Colombia to offer the possibility of making transfers through cell phones.
We have also been successful in establishing very valuable alliances with the [Colombian] government. The delivery of subsidies for low-income families could not be possible in Colombia without the private sector. Coordination with banking institutions like Davivienda was fundamental to be able to deliver the help effectively.
With the municipality of Medellin, we made available a financial application that allows users of the Medellin metro to make all kinds of transfers and transactions. Soon, the city will be able to provide other services to the population, related to things such as health, culture, entertainment, and, in a way, security.
Efraín Forero speaks to an entrepreneur during the 2015 Hackathon, held by the Davivienda group in Israel. Photo courtesy: Davivienda.
Q: What makes a partnership work?
A: There is a fundamental issue that must be borne in mind when establishing a partnership: everyone has their own motivations. It is important that everyone can benefit from a partnership. It is the only way to make it truly sustainable over time.
The second thing is that we must all have a shared vision and purpose.
And thirdly, we must work on the fundamentals: the control of the alliance, the results, and the aspects that are going to be reviewed periodically. You also must define from the beginning what to do if it's not working.
Q: How will the partnerships in the Northern Triangle lead to increased private sector investment?
A: We have structured six working groups to deal with specific challenges, including education, health, Internet access, and banking.
Through roundtables, we are defining and coordinating specific actions for private companies and seeking support of public entities that can facilitate this work, and we are looking to expand the network of participants in this call to action to multiply the positive impact of the initiatives.
Davivienda brings to the table experience with solutions that can promote financial inclusion, particularly in housing finance and SMEs [small and medium-sized enterprises]. We have been doing it in El Salvador through [the mobile application] DaviPlata, which we have seen evolve in a positive way. We will now work with local partners in each of the countries to be able to increase financial inclusion.
In Central America, there is still a large tendency of using cash. Many people do not have access to a financial institution that will give them the opportunity to save, get credit, or even have a vehicle that provides them with financial education.
Q: What will give private sector companies more confidence that now is the time to invest in Central America?
A: Certainly the U.S. government's commitment to the development of the region is a factor that weighs in the investment decisions.
Central America is very competitive in terms of production costs and access to international markets, especially the North American market, which is an important asset that can attract private sector investments. We believe we can expect a more active recovery of the economy in 2021.
Q: Beyond the financial sector, whom do you have to partner with in Central America to succeed?
A: It is very important to partner with governments in order to adjust regulations to truly push forward the digitalization agenda and capitalize on the work that banks can do.
For Central America, it is still a challenge to coordinate the actions of all private companies to achieve a more forceful impact. For the partnership to work, it will be essential for international players to partner with local companies, governments, and non-governmental entities that can help materialize the commitments.
We have set very ambitious objectives, and it is vital to partner with local governments and invite local private players to be able to achieve them.
Q: What keeps you motivated?
A: We’re motivated by being able to give our communities the opportunity for a better future. We can break paradigms and cross borders, and we know we can deliver so much more… In addition to evolving into a digital bank, we want to push forward many initiatives that can help us achieve much more sustainable countries. From the social perspective, we can work even harder to be able to have equal opportunities for women, which for us is a critical objective.
Published in August 2021