Empresas Públicas de Medellín (Public Enterprises of Medellín, EPM) is a utility company offering energy and water services based in Medellín, Colombia’s second largest with 2.7 million inhabitants. EPM also has a telecommunications company, grouped under the UNE brand.
EPM’s clients often have outdated, inefficient home appliances, or lack access to these in the first place – which leads to inefficient use of energy and higher costs. Furthermore, many of the company’s clients are excluded from formal credit lines that could enable them access to better appliances. This is in part due to a lack of credit history.
In 2008, the company decided to launch an inclusive business program calledFinanciación Social, aimed at offering microcredit loans to its low-income customers. The offering is based on the unique credit score EPM obtains from clients’ payment records on their utility bills. Thereby both interest and default rates have been kept low.