Can you tell us about El Salvador and your market?

‘We are a small country in Central America with seven million inhabitants. In addition, nearly one-third of our population – about two million – lives and works in the United States. The money they send back home is an important pillar in our economy. El Salvador has plenty of opportunities and hardworking people but unfortunately lacks leadership to realise its full potential and is being sucked deeper into a culture of insecurity, mainly because of drug-related violence. Life is very challenging for many – about 80% of the population lives on not more than 250 US dollars a month. This large part of the population is Optima’s target group – with our products and services we want to impact their lives for the better.’

Gustavo Siman, President and Founder of Optima Financial Services
Gustavo Siman, President and Founder of Optima Financial Services

Can you describe a typical client from Optima?

Our clients – currently about 4,000 – are re mostly self-employed, for example as taxi drivers, small shop owners or cattle traders, and operate in the informal sector and have very limited access to formal financial services. Two-third of our clients are women, the majority live in urban areas and the average loan they have taken out is about USD 2,300.

From a financial side – how did you found Optima?

I founded Optima with my own capital. The company has been profitable since its first year of operations in spite of rapid growth and investment. In late 2012, a significant capital increase was made and two new investors joined. We have also received debt financing from several banks, funds and bilateral institutions globally. We have also been approached by some equity investors with interest in becoming shareholders in Optima and, given our fast paced growth, are already starting to plan for this next stage.

What makes Optima an innovative player?

We can grow with our clients. Let me illustrate this. One of our clients has a small sewing business and got a very big order to make uniforms for public schools, for which she required quite some working capital. Many commercial banks consider this to be very risky and are reluctant to provide this capital. We have developed a micro factoring product that enables us to provide short-term working capital to clients like her on the basis of these clients’ accounts receivables. By offering this product, we can also address the financial needs of the so-called lower end of the small- and medium-sized enterprises.’

Focus on the needs of your clients and then plan, design, test and roll out your business. And most importantly: surround yourself with experts who are passionate about their work.
Gustavo Siman

What will be your next innovative product?

A green product. 25% of the loan that Hivos-Triodos Fund has recently provided to Optima is earmarked to be invested in energy efficiency/renewable energy products. We are currently looking into the possibilities of developing such a green product that will impact households as well as businesses.

Optima is currently a credit-only provider. Is this going to change?

Yes. We want to become a ‘one-stop-shop’ for our clients where they can also put their savings and take out insurance, for example. This requires the transformation to a regulated financial institution which is a long, slow and expensive process. But we are ready for it. We have started small, carefully managed our growth and made sure that we have the right infrastructure but especially the right people working with us to scale-up our business.’

How do you make sure that Optima has the ‘human capital’ to do this?

By building a strong company culture – a culture that is based on results and values. Many of our staff are university graduates. We stimulate them to take ownership of exciting opportunities that we can offer as a growing organization. I strongly believe that ownership leads to empowerment.’

One of Optima's clients
One of Optima's clients

Is your entrepreneurial horizon broader than Optima?

Yes, my focus is also on renewable energy and affordable housing. Real estate is my hobby and was also my favourite class during my time at Harvard. In El Salvador, affordable housing supply is limited and most rural land development projects allow title of ownership only until the lot has been fully paid. I have changed this through a product that allows clients to immediately take title of ownership since the initial land purchase agreement. I have also invested in renewable energy. In the coming year, I’ll complete construction of a 100 MWp solar photovoltaic plant, one of Latin America’s largest solar plants which will provide 150,000 Salvadorian households with access to clean energy as it will save 90,000 tons of CO2 annually and affordable by supplying energy at 35% reduction in price. A very, very exciting project. My main focus, though is and will continue to be Optima, which I want to grow into a leading provider for microfinance and the small-and-medium-sized enterprises, both in El Salvador and the region.

Do you see yourself as a social entrepreneur?

Yes, I do. This is why I came back to be an entrepreneur in El Salvador rather than staying in New York. I was seeking to achieve social impact in addition to financial return, specifically in the areas that I consider are most needed in Central America: inclusive financial services for the base of the pyramid, worthy affordable housing and renewable energy. I feel blessed to have been able to build these businesses. It is really exciting to see these businesses grow and reach more people. Moreover, I firmly believe that real impact is done by enabling and teaching low income families how to work instead of simply granting donations.

Hivos-Triodos Fund

Hivos-Triodos Fund is a joint initiative of Triodos Bank and Hivos, established in 1994. The fund is active in developing countries and provides finance to young, innovative microfinance institutions that are active in underdeveloped markets. It also aims to catalyse growth of small and medium-sized enterprises, in particular in renewable energy and sustainable agriculture.

For an overview of our later-stage funds in emerging markets, please visit the Emerging Markets investment page.