Telefonica has set up a joint venture with Spanish bank BBVA to develop a consumer loan business in Colombia, confirming earlier reports. The company will be called Movistar Money Colombia, jointly controlled on a 50-50 basis, and will sell loans to Telefonica’s 19 million-plus residential and business customers in Colombia, said the partners, who have already conducted a 6-month commercial pilot among a base of over 300,000 Movistar Colombia customers to test the service.

Under the terms of the deal, Telefonica and BBVA also intend to develop new digital sales channels and operations for Movistar Money Colombia, which is set to begin operations in the second quarter of 2021. Different products will be launched in phases, starting with consumer loans for the purchase of handsets, followed by discretionary loans and corporate loans in a second phase. Both the amount and form of payment will be tailored to the client’s financial profile, with the entire process of taking out and managing the loan done digitally.

The partners added that the current agreement is specific to Colombia, but could eventually expand to other countries in South America where they both have a presence. Telefonica launched a similar service called Vivo Money in Brazil earlier this year.

In Spain, Telefonica’s Movistar Money service with CaixaBank granted customers over 16,000 loans amounting to a total of EUR 45 million in 2019. Movistar customers can request a loan of between EUR 1,000 and EUR 4,000 in less than 48 hours and can pay it back via their monthly Movistar services bill over 24, 36 or 48 months at an interest rate (APR) of 16.48 percent.