Fitch Ratings Recognizes Liquitech as the First Non-Bank Factoring Company in Colombia

Published 8 months ago

Global firm Fitch Ratings has awarded Liquitech its first rating as a primary originator of credit assets. This provides a testament to the company’s efforts towards transactional excellence, transparency, and security in factoring deals. This positions Liquitech as the only non-bank factoring company with a current rating in the country in this category.

Liquitech’s rating falls within level 3 on the national rating scale, indicating the company’s competence in overall functions as an administrator, with a stable outlook. This offers assurance to its clients and investors that the company will maintain its efficiency.

A Differentiating Factor in the Local and International Market

The rating is a starting point for Liquitech, along with other aspects that the company is working on, such as the ISO 27001 management system, academic and business recognitions, and the sophistication of their processes supported by highly recognized entities. According to Alexandra Mendoza, Liquitech’s founder and CEO, these features help popularize electronic factoring in Colombia as an alternative financing mechanism, ensuring security for all ecosystem actors: issuers, payers, and funders.

Determining Factors in the Rating

Fitch Ratings’ evaluation of Liquitech followed the strict parameters of the Methodology for Rating of Financial Asset Administrators. This examines multiple business factors, which account for its current and future perspective.

Experienced and Knowledgeable Team

Despite the company’s recent founding in 2019, the Liquitech executive team - composed of Alexandra Mendoza, Pedro Guinovart, Alejandro Name, Tulio Sarabia, Reynaldo Villareal, and Javier Navarro - has extensive sector experience, contributing all their knowledge to the administration of this type of asset. Additionally, the joint venture carried out a year ago with asset managers Kandeo and Cross Regional adds to this team’s experience in financing markets with high leverage needs.

Low Staff Turnover and Incorporated Learning Programs

The company’s workforce has grown due to expected growth goals and is estimated to reach 40 positions by the end of 2023. A new 48-hour induction program is in place where new staff rotate through mission and strategic areas of the company.

Adequate Internal Controls

Liquitech has implemented best practices in the financial sector regarding risk management and policy documentation, despite not yet being regulated. Constant internal audits are carried out to ensure all manuals and procedures are well implemented.

Portfolio Management with Automated Platform

Liquitech backs its origination processes with its automated commercial platform, enabling operational efficiencies, maintaining digitized documentation, and generating customized reports. Early delinquency management is based on information provided by RADIAN.

Solid IT Platform Supporting Operations

The operations of Liquitech are highly automated and backed by its platform, which was developed internally. The expected expansion can be supported by the current platform, which provides high standards in cybersecurity.

Liquitech’s Future

Thus, Liquitech positions itself as the only fintech in the electronic factoring industry in Colombia with a current Fitch Ratings rating as a credit asset originator. This is in line with its expansion plan, which includes the implementation of the first bond issuances in the American market, supported by electronic invoices in Colombia, providing liquidity to the country’s SMEs.