Enabling financial inclusion in Colombia

Empresas Públicas de Medellín


14 January, 2013


Case Study


Empresas Públicas de Medellín (Public Enterprises of Medellín, EPM) is a utility company offering energy and water services based in Medellín, Colombia’s second largest with 2.7 million inhabitants. EPM also has a telecommunications company, grouped under the UNE brand.

EPM’s clients often have outdated, inefficient home appliances, or lack access to these in the first place – which leads to inefficient use of energy and higher costs. Furthermore, many of the company’s clients are excluded from formal credit lines that could enable them access to better appliances. This is in part due to a lack of credit history.

In 2008, the company decided to launch an inclusive business program called Financiación Social, aimed at offering microcredit loans to its low-income customers. The offering is based on the unique credit score EPMobtains from clients’ payment records on their utility bills. Thereby both interest and default rates have been kept low.

The credits EPM offers are distributed via a series of partner retail stores, and cover the purchase of new appliances or home improvement materials. In addition, EPM provides credits for the purchase of computer equipment through UNE.

Supporting clients to purchase the goods covered under the program makes sense from a social and environmental perspective – as the program enables access to better energy services, saves energy and expenses related to outdated, inefficient equipment, and builds a credit score that allows customers to access other formal sources of credit in the future.

EPM has issued 100,000 cards by autumn 2012, with the goal of expanding the program to 500,000 clients in 2016. In 2012, the program was further expanded to micro and small sized enterprises and could be replicated in other markets like Brazil and Mexico. EPM expects to reach profitability of the project in 2013.