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PAES was established to commercialise its proprietary data analytics platform, which has successfully created and continuously serviced the global microfinance portfolio securitisation market since 2006.
The initial system development was self-financed by the management team until Legatum Ventures provided mezzanine debt in Q3 2008. The system facilitates the following four key services: data cleaning and standardisation, data categorisation, data correlation, and predictive analysis. These easy–to-use features provide financial institutions with efficient portfolio analysis, at-a-glance risk management and a robust strategic forecasting ability, thus equipping investors to make more rational and better informed investments. The company’s initial target market is the global microfinance industry, small and medium size enterprises (SME), banks and credit unions.
Company Achievements since Legatum Ventures' Investment
- Deployment of PAES for USAID and SIDA sponsored financial institutions in El Salvador, Nicaragua and Guatemala;
- Hiring of critical sales and marketing personnel;
- Continual investment in software development and an easy-to-use web interface;
- Preparation for the launch of Version 2.0, a more scalable product;
- Founding member of microRisk Alliance, the first global platform established to discuss microfinance risk management worldwide;
- First government endorsed provider of portfolio analytics and risk management services to SME banks in Mexico.
Social Impact
- PAES will enable emerging and small financial institutions in developing markets to assess their risk exposure in real time and plan for the future accordingly;
- This will allow such financial institutions to build credibility amongst international funders and investors, as well as with regulators, resulting in a greater flow of capital into this segment and increased penetration of financial services in developing markets;
- By helping MFIs better understand and quantify their portfolio risk, PAES will ultimately reduce the borrowing cost of end clients.
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Overview
The Portfolio Analytics Expert System (“PAES”) provides easy-to-use outsourced data harmonisation, risk analysis and portfolio management services to emerging financial institutions characterised by low ticket sizes but large transaction volumes.
Total Capital Invested
USD 250,000
Investment Thesis
- Conventional risk management service providers are unsuitable for small clients and enormous transaction volumes;
- Risk management market is growing, but untapped in emerging markets;
- Investors, regulators and multilateral agencies demanding more rigorous risk management tools from emerging financial institutions;
- Proprietary software asset that can be rapidly deployed in the market;
- Strong founding team that executed the first, and largest, ever microfinance securitisation;
- Strong pipeline of business in Mexico, El Salvador, Nicaragua and Guatemala.
Stake
N/A
Date of Investment
Date of Exit
Security Type
Other Investors
Legatum Board Seat
No
Previous Investors
Founders
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