The users of this fintech platform are overwhelmingly (90%) microentrepreneurs, with a business volume that does not exceed US$230 per month.

IDB Lab's investment is part of a US$3.5 million seed round in which venture capital funds and business groups in the region are participating. Cubo's development and expansion plans will provide 70,000 beneficiaries, 40% of whom are women, with tools to help them digitize and develop their businesses and formalize their relationships with financial institutions.

Digitalization continues to be a particular challenge for micro, small and medium-sized enterprises in Central America. In some countries there are an average of 11 mobile points of sale per thousand inhabitants, half of those in other countries in our region. Encouraging digital payments and collections, whether online or in person, increases the sales capabilities of businesses and opportunities for higher income for the owners. It also expands financial inclusion in Central America, where only 43% of the population has an account in a financial institution or 25% make card payments, compared to 94% and 80% in high-income countries.

Created two years ago in El Salvador, Cubo offers a user-friendly solution for MSMEs to accept credit and debit card payments, links for quick payments and QR codes for digital payments that can be physically printed or digitally shared. The startup aims to consolidate its market in El Salvador and expand into Guatemala, Panama and Costa Rica this year, before new rounds of funding that will allow it to launch in other Central American and Caribbean countries.

"Fintechs have become key players in helping us move towards greater financial inclusion and digitization in our region. This investment in the technology startup Cubo combines our efforts to energize the nascent Central American entrepreneurial ecosystem with the promotion of accessible and efficient financial services that can improve the business prospects and incomes of microentrepreneurs", said Irene Arias, manager of BID Lab.

This is IDB Lab's first investment in a Central American fintech, and part of the resources come from the We-Fi program, an initiative that seeks to address the constraints faced by women-led small and medium-sized enterprises in developing countries.

Translated by: A.M