Colombia, situated in the northern part of the South American continent and with both a Pacific and an Atlantic coastline, has a population of 45.5 million (source: Departamento Administrativo Nacional de Estadistica – DANE). After several years of internal conflict, the security situation has improved, the economy has grown and the inflation rate has decreased thanks to the strong commitment of former president Álvaro Uribe and his successor, Juan Manuel Santos, who took office in 2010. Due to the global crisis, GDP growth in 2009 was only 1.5%, but this climbed to 4.3% in 2010 and 5.9% in 2011 (source: DANE). The financial authorities have launched several programmes to facilitate access to the formal financial system for those segments of the population that have generally been excluded from it.

In spite of the progress that has been made, poverty and persistent economic inequality remain key challenges for the country. Colombia's rate of inequality is one of the highest in Latin America.

The banking sector in Colombia had total assets of more than USD 152.3 billion at the end of 2011 (source: Superintendencia Financiera de Colombia). A consolidation process has been under way in the sector for several years, and there were 23 active banks in the country at the end of 2011; however, foreign financial institutions are in the process of buying local banks. There are also some foreign banks which focus on commercial and consumer lending and other banking services. Nonetheless, the level of financial intermediation remains low. The ratio of domestic loans to the private sector as a percentage of GDP was 43.4% at the end of 2010 (source: World Bank Data base). Moreover, the banks are not meeting the needs of small businesses and ordinary people, and other institutions, such as NGOs and co-operatives, offer only limited financial services to these communities.

The ProCredit group has a long history in Colombia, going back to the 1990s, when IPC provided advisory services to the largest local group of microfinance companies. In September 2007, ProCredit launched operations in Colombia as a finance company to begin addressing the supply gap in the market for credit and financial services. Banco ProCredit Colombia S.A. received a full banking licence in May 2008, demonstrating the strong interest on the part of the authorities in facilitating ProCredit's investment in the country. The fully-fledged commercial bank not only grants loans, but also mobilises deposits, and thus promotes a savings culture among Colombians.

Banco ProCredit Colombia has already achieved promising results. In 2011 the bank optimised its processes and closed the year with 20 branches in Bogotá, Cali, Medellín, Cúcuta and Pereira and a net outstanding loan portfolio of USD 94.1 million. Expanding the branch network to other medium-sized cities is one of the challenges the bank will face next as it seeks to make sound, flexible and efficient financial services accessible to a growing share of the population.