Financial inclusion in emerging markets is undergoing a profound paradigm shift. As traditional banking expands beyond physical branches, institutions face a dual imperative: reaching remote populations while modernizing legacy architectures.
In a recent episode of The Fintech Podcast, Hernando Chica, President of Banco Agrario de Colombia, shared how the nation’s largest territorial bank transformed its digital maturity index from 20% to over 51%. By pairing Open Finance infrastructure with on-the-ground presence, Banco Agrario offers a roadmap for technology-enabled rural banking.
Hernando Chica,“Currently, everyone, including traditional banking, is a fintech. We have all had to evolve in one way or another.”
President in Banco Agrario de Colombia.
The new paradigm: Traditional banking is fintech
In the fintech landscape, the boundary between traditional financial institutions and technology startups has dissolved. As Hernando Chica, President of Banco Agrario de Colombia, stated on The Fintech Podcast:
Managing over $10 billion in assets, with 70% concentrated in the agricultural supply chain and 30% in micro-enterprises, Banco Agrario represents 51% of Colombia’s agricultural microcredit market. Balancing a massive social mission across remote territories with competitive digital capabilities required an end-to-end strategic pivot.
Digital transformation: From legacy systems to API ecosystems
To modernize operations without disrupting service, Banco Agrario established a three-part modernization framework:
- Value and Transformation Office: A dedicated unit combining IT development, product management, and marketing under an agile governance structure.
- API Integration: Instead of immediately replacing the core system, the bank connected its architecture via APIs to local clearing houses (ACH) and payment networks (Redeban, Credibanco).
- Execution-Driven Partnerships: Joining Colombia Fintech and partnering with specialized firms like Digital Bank to transition from strategy consulting to technical implementation.
These initiatives shifted the bank’s digital maturity index from 20% to over 51%, reducing loan approval times from 18 days to under 24 hours by digitizing 100% of documentation.
💡Hernando said…
“Three or four years ago, physical sacks of paper files were still traveling from the Colombian Amazon all the way to Bogotá just to get a loan approved. Today, that process is 100% digital, bringing response times down from 18 days to under 24 hours.”
Open Finance & Open Data in emerging markets
Open Finance and Open Data frameworks increase market competition and lower acquisition costs for banked populations. However, rural Latin America presents unique structural challenges:
| Indicator / Metric | Urban Areas | Rural Dispersed Areas |
| Household Internet Access | 75% | 25% |
| Cash Transaction Share | ~70% | ~90% |
| Financial Visibility | High (Credit bureau records) | Low (Informal economy) |
While over 90% of citizens hold transactional deposit accounts for government subsidies, cash withdrawal rates remain near 100% immediately after receipt. This cash economy eliminates transaction history, creating an “invisibility gap” for traditional credit scoring algorithms.
[Government Subsidy / Income] ──► [Digital Account] ──► [Immediate Cash Withdrawal] ──► [Loss of Transactional Data]
The hybrid operational model
To extend financial access where connectivity is sparse, Banco Agrario deployed a hybrid delivery framework:
- On-the-Ground Advisory: Equipping field officers with offline-capable mobile devices to conduct credit evaluations directly at farm locations.
- Community Connectivity: Providing free Wi-Fi across 800+ branch locations situated in main municipal squares.
- Proprietary Digital Products: Launching Biko, a digital wallet with over 650,000 users (90% in rural areas), alongside emoji-guided chatbots (Groggy) and mobile field tools (MoviAgro).
- Alternative Risk Mitigation: Utilizing state guarantee funds (FAG for agriculture, FNG for micro-commerce) and climate-indexed insurance to underwrite unbanked borrowers.
AI Governance in credit underwriting
While Generative AI and automated agents optimize customer support, satellite crop monitoring, and consumer loans, agricultural microcredit continues to require physical verification and biological cycle tracking.
The primary challenge for financial institutions lies in AI Governance: establishing clear regulatory boundaries, human-in-the-loop oversight, and risk frameworks to ensure automated decision-making preserves financial stability while expanding access.
How Coinscrap Finance helps financial institutions
Coinscrap Finance provides AI-powered transaction categorization, behavioral enrichment, and automated micro-saving engines to help banks analyze and monetize transaction data, improve risk scoring, and boost digital engagement.
Book a demo with our team to explore our financial intelligence modules.
