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Data-Driven Lending in Latin America with Tarek El Sherif, Founder and CEO of Zinobe

Miguel Armaza is joined by Tarek El Sherif, Founder and CEO of Zinobe, a Colombian fintech specialized in online lending. Founded in 2012, Zinobe has made almost 1.3 million loans and uses technology to develop online credit products for consumers and small businesses. Zinobe has developed a data-centric credit model to help target underserved markets in Colombia. In 2020, Zinobe was the highest-ranked Colombian company on the FT’s fast-growing companies ranking with a compound annual growth rate (CAGR) of more than 100%.

Although Tarek El Sheriff has been living in Colombia for almost a decade, he is very much a citizen of the world. Born in New York to an Egyptian family, Tarek grew up moving around Europe and the US. After working in investment banking in New York and London for multiple years, he realized he wanted to follow his family’s footsteps, get rid of the banking bureaucracy, and become a business owner. Around the same time, Tarek and his Colombian wife decided to move to Bogota.

After relocating to Colombia, Mr. El Sheriff began analyzing European and US companies focused on data-driven lending and realized the alternative lending model presented an appealing opportunity in emerging markets. Tarek quickly realized he could start giving credit to Colombians that had no access to the financial system, while also significantly improving the user experience in a country with severe financial inclusion gaps.

Challenging the Status Quo

Backed by friends, family, and former banking colleagues, Tarek did not have a lot of trouble raising his initial seed round. However, the real resistance came from the Colombian consumer. Around the time Zinobe was being founded, there had been an unfortunate wave of pyramid schemes that destroyed customer trust and made people suspicious of new financing models. And although Zinobe was offering to lend money (without collateral), people were still suspicious and it took some work to start earning consumer trust.

As he began assembling his team, Tarek made a conscious decision to hire employees with international experiences. He was and is still convinced a global perspective gives people a different frame of reference and makes them aware the status quo can be changed and challenged. He needed people willing to dream big and defy a system dominated by the same traditional incumbents for multiple generations.

They started small. In the early days, Zinobe was offering small credits with short maturities, but over the years they progressively expanded the size and tenor of their loans and developed cash management capabilities to help customers with additional payment tools. In 2019, Zinobe entered the small business lending market and a year later Tarek believes the pandemic and a shrinking credit market will present an opening to go upmarket and serve even larger clients.

COVID Response and the Road Ahead

As the Colombian government began preparing a stimulus package to help the population navigate the shocks of COVID, authorities realized some of the people who needed their help the most were not included in the financial system. So they turned to companies like Zinobe to reach these consumers. Tarek and team quickly partnered with the government and delivered the country’s first viable product in a record time of less than three weeks.

Looking forward, Tarek wants to continue developing their Colombian footprint while also expanding internationally. For the first time in eight years, the company has partnered with a large Mexican leasing firm to provide Zinobe’s technology platform and lending know-how. They hope to replicate this model across the region, allowing Zinobe to focus on its core strengths.

When asked for advice on launching a startup in emerging markets, Tarek recommends leveraging local relationships such as family offices and local investors. They have a long term vision of the country and can open a lot of doors that international VCs cannot.

You can find the transcript of this episode here.

Tarek El Sherif

Tarek El Sherif is the founder and CEO of Zinobe, a Colombian fintech specialized in online lending. Tarek has over seven years of investment banking experience split between New York and London. Previously working for Deutsche Bank Global Markets providing corporates with derivative solutions for asset and liability management. Prior to that, he worked at JP Morgan in the Investment Banking Coverage and M&A group. Tarek holds an MBA from Columbia University and a Bachelor of Science in Finance from Northeastern University. He currently lives in Bogota with his wife and two daughters.

Zinobe

Zinobe operates in Colombia and develops online credit products for the consumer and small business sectors. The company is focused on using technology to provide the highest level of customer experience and automation to maximize operational efficiencies. Zinobe has developed a data-centric credit model to help target underserved markets in Colombia. In 2020, Zinobe was the highest-ranked Colombian company on the FT’s fast-growing companies ranking with a compound annual growth rate (CAGR) of more than 100%. For more info, visit www.zinobe.com

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Miguel Armaza

Miguel Armaza

🎙Co-President/Podcast Host @WhartonFintech. Fintech investor @ Gilgamesh. 📚MBA/MA Candidate @Wharton/@LauderInstitute. Author of Fintech Leaders Newsletter✍️

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