Why We Invested: Jefa
Digital banking solutions have exploded throughout Latin America as the COVID-19 pandemic has driven millions of people online for the first time. A host of contextual tailwinds have augmented digitization across the financial services industry, and innovations have begun to confront historically low adoption rates in a region constrained by cash-based economies, inaccessible or expensive credit, and risk averse incumbent institutions. For women, however, this progress marks only the beginning of a long-awaited paradigm shift.
The Problem: Women Continue to Lack Access to Essential Financial Services
As more and more of the population becomes integrated into the formal financial sector, women continue to make up much of the untapped market opportunity. Lower educational attainment, limited employment opportunities, and male-dominant asset inheritance have reinforced barriers to inclusion. Women account for the majority of the unbanked population both in Latin America, and worldwide, despite being identified as more responsible than men in allocating financial resources and investing in income-generating activities.
Yet, no vertically integrated banking solution in Latin America has sought to create a platform tailored to women’s needs and preferences. Even of the women that do have access to a bank account, 73% are dissatisfied with the services. Furthermore, neither incumbents nor new market entrants collect gender-disaggregated data. Products continue to be developed in accordance with data supporting traditional male standards and marketed through male-dominated channels.
The Solution: Jefa’s Digital Bank Designed by Women, for Women
Founded in 2020, Jefa seeks to break this cycle by creating a banking solution designed specifically to meet women’s needs. CEO Emma Sanchez-Andrade Smith, a previous fintech co-founder, heads the team of cutting-edge leadership. CFO Malavika Chugh brings consumer finance expertise from PwC and LendingClub, and CTO Spandana Reddy draws on deep experience across Snap, Facebook, Apple, and Microsoft. The team attracted pre-seed investment from leading venture capital funds and angel investors, and the close of their $2 million seed round now marks another major milestone.
By tailoring products and services to women’s distinct financial behavior and using gender-disaggregated data to inform distribution channels, Jefa can more precisely and impactfully reach their target audience. Once registered through a five-minute process, users gain access to savings accounts with no deposit minimums, digital payments with in-person agents to facilitate cash in / cash out functions, and tandas (informal rotating savings and credit associations) that combine community savings and peer-to-peer lending. Visa and Jefa have also launched a seven-year regional partnership, paving the way for customers to obtain a Visa debit card. Jefa further strengthens its active community through loyalty programs, goal-based tracking, and financial education content.
The Opportunity: Partnering with Women Throughout Mexico, Latin America, and Beyond
Jefa’s mission is simple: to improve women’s financial livelihoods by providing access to relevant financial services. This objective combines tangible purpose with significant profit. Digital banks can expect a higher lifetime value from female customers due to longer lifespans, heightened customer loyalty, propensity for referrals (leading to lower customer acquisition costs), better repayments, and tendency to save more (lowering the cost of capital).
Mexico marks the launching point for Jefa’s journey, and the company plans to expand solutions to women throughout Latin America and the Caribbean. Studies have reinforced the positive growth associated with inclusion, and by empowering women to take part in the global economy Jefa has the potential to catalyze meaningful growth and impact. We are excited to welcome Jefa into the FINCA Ventures family, and look forward to working together to expand financial inclusion for women.