Alejandro De León Moreno, is the founder and CEO of the startup MICROWD. Microwd is a FinTech company that connects women entrepreneurs in Latin America who look for a microcredit from investors seeking economic profitability and social impact.
Alejandro, Who are you? Tell us a little about yourself and about your background.
I studied business, and then I did a master’s degree at Brown and IE in addition to my master’s degree in philosophy. From 2005-2009, I worked at JP Morgan. In 2009 I started an NGO, and in 2010 a carsharing company. These were the steps that introduced me to impact entrepreneurship.
I realized that profit is what moves countries forward. “The more money the rich have, paradoxically so do the poor”. I started an NGO with the aim of redistributing wealth when I realized there was an opportunity for all social classes. I started giving scholarships to young people. Then, their mothers started asking me for microcredits for their entrepreneurships, and from there, Microwd was born. We now support 8,000 women and approximately 20,000 jobs. We plan to generate 40,000 more in the next 3 years. A fun job with great social impact.
People start giving back to society when they consider themselves prosperous, this generates Microwd’s human capital. Philanthropy is the nature of mankind. If you put one man against a gorilla, the gorilla will win. But if you lock up 100 men and 100 gorillas, the man will win. The ability to organize for each other is what makes us humans. At Microwd we encourage human organization through trade.
What is Microwd? How does it work? Give us your vision and mission
We want to be a bank where people are happy to pay. Treat them like a private bank that benefits from their profit, while at the same time we generate a real social impact.
Our mission is to look for extraordinary women located at the base of the pyramid, so the whole circle becomes virtuous. They invest in their family, education and community with the money they generate.
They say that vision should be something you can’t achieve, which is why ours is to eradicate extreme poverty. Although I believe that statistically we are on the right track. Globalization allows you to compete and competition makes everything more fair.
Let’s talk about your stakeholders:
The borrowers, what are they like? Who are they? Mention some of the cases that have marked you the most?
We do not empower women, we give them the option to empower themselves. The profile they have is that of a very ambitious woman with limited resources. Today she wants to have 1, tomorrow 5, and the day after 10. It is the profile of a hard-working woman with hopes of growing her business and saving money. She wants to constantly grow. 80% of our women diversify with us, “she starts with a cow, and ends up setting up a gas station”. Real entrepreneurs. 29% of our staff are women who at some point were borrowers and now work with us. Many are cases of great self-improvement.
One of my favorite cases is that of a woman who sold clothes through WhatsApp. As time went by, she had more contacts in her address book. Because of this, she sold her products faster as the clientele could perceive that there was more supply that could take away the garment. I like this case because this woman conceived the social network as a value-added auction. She knew how to compete for demand. A true business woman.
Why specifically women?
“Even my wife says I’m too feminist”. “I believe that women are biologically more prepared to make things go well. Women have a number of virtues that are better suited to our business model. They are more responsible by nature, which not only has a greater social impact but also makes the investment more profitable for our investors.
I would also say that a microcredit plan for men is just as necessary; the people at the base of the pyramid who need it most are men but women by nature are incredible beings.
Investors? What are your returns with them if you can mention it?
Our investors are philanthropists. They are people who trust in an open society, a society open to change and open to judgment. Our investors believe that with this, situations will end up better than they found them, generating economic profitability and social impact.
Tell us about Fintech, and its contribution to Human Capital
Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. It primarily works by unbundling offerings by such firms and creating new markets for them. “I believe very much in the bankarization of society and with these facilities the improvement is immense”. Poor areas live in low standards for many reasons, one of them is that they do not have the savings capacity to improve their living conditions. Fintech provides these instruments, both access to debt and financial products. Getting out of poverty is mental and financial planning, this is why I believe that FinTech generates a lot of opportunities for human capital and thus increases the wealth of the individual.
What is your relationship with the banking systems?
We don’t really have any direct relationship with the big banks, although one of our goals is that women will end up banked. For us, it is a success when these women’s businesses become big enough for a bank to grant them a loan. It charges a lower interest rate than Microwd (26%), and their prosperity would be greater. In the end, we bring women into the formal market. That’s our goal.
Do you use cryptocurrencies as a transaction vector?
“You nailed it! Just today we have incorporated blockchain into our transaction models”. Cryptocurrencies are going to help us in 2 things primarily. The first one is transparency and treatability, the blockchain generates a system of trust between us, the investor and the borrowers. Thus, we create wealth through trust. The second advantage is the fact that we can process our own currency with its transactional, savings, efficiency and light speed attributes. These attributes generate an efficiency in the communities that end up being an important social aggregate in their exchange.
Microwd has a social and financial addition to the world? What is it?
It affirms how Microwd and companies like it will form the beginning of a new generation of the financial system. The companies of the future will realize that there is also profitability through initiatives that have a social aggregate and a positive impact on human capital.
What do you think is the biggest obstacle to the fulfillment of your mission?
I think the biggest obstacle I have encountered is the moral investment we have in Europe. People think that investing in microcredit is taking advantage of people, when that is not the case. We both benefit and generate profitability. This erroneous, anti-capitalist conception becomes a mishap. The more wealth the less poverty. The reduction of extreme poverty goes hand in hand with the injection of capital into nations. “I believe there is no better solution than for us to trade on the virtues that made us rich”.
Has your initiative been affected by covid?
To be honest, we have benefited from this change of cycle and this pandemic. With this great state of need, women have been using Microwd more than ever. It allows them to raise capital at a time when that’s the hardest thing to do. They get it, pay it off and sell it faster than ever before. We have better clients who need to build wealth faster. Our profitability is much higher since covid started.
A message for all those people who might join you in this initiative?
My advice is to take advantage of the opportunity we have for growth. Poverty reduction is increasing and society is becoming more prosperous. We have to take advantage of trade and let our virtues be leadership, judgment and ingenuity over compassion and pity. That way we will leave things better than we found them. Let us take advantage of the facilities that this era grants us.