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Cumplo takes on the Chilean banking System

Editor’s note: Introducing our writer-abroad Justin Koufopoulos. Justin is living in the UK conducting research in psychology that he plans to spin off in his first company.

He has a passion for government policy, and believes that entrepreneurs can solve the world’s most challenging problems!

Justin visited us in Chile for over a month, and while he was here he got to sit down with Jean Boudeguer from Cumplo

Nicolas Shea and Jean Boudeguer never expected to receive a formal complaint from the Superintendencia de Bancos e Instituciones Financieras or Superintendancy of Banks and Financial Institutions (SBIF) requiring that their new company, Cumplo, a peer-to-peer lending service, cease its activities immediately.

Cumplo, whose English translation means ‘fulfill,’ is a peer-to-peer or P2P lending service, and was founded by Shea in 2012. P2P lending offers an alternative to traditional loans and investing options. By removing local ‘middlemen’ such as banks or other financial institutions, lenders can evaluate the financial risk of potential borrowers directly.

Jean Boudeguer (left) Cumplo's General Manager and Nico Shea (right), founder of Cumplo.

The first Chilean P2P lending service…

While Cumplo is the first P2P lending service in Chile, neither of the two men are strangers to innovation.

Shea is the founder of Start-Up Chile, where Jean served as Executive Director for nearly two years. Start-Up Chile is a government-backed incubator program, which aims to turn Chile into a Latin American hub of international entrepreneurship by 2014, encouraging both local entrepreneurship and foreign investment.

Why then, was Cumplo, a startup launched by the founder of Start-Up Chile and its previous Executive Director being pushed by a government agency to shut down its activities?

This was the exact question Shea and the Cumplo team wondered as the company and the SBIF complaint made local headlines.

Pushed to shut down by the SBIF

According to news and media outlets publishing the SBIF statement, Cumplo was in violation of Article 39 of the ‘Ley de General Bancos’ or General Banking Law. Article 39 prohibits any person not authorized by law to receive money from the public, as well as the brokerage of loans. Despite Cumplo altering their business model in response to the allegation, the SBIF has refused to withdraw their complaint.

Dismayed, Cumplo watched as investors and clients went to ground as the team prepared to defend their case before the prosecution.

A challenge to Chile’s banking system

Cumplo is not the first P2P lending service to face down legal trouble. Prosper, a U.S.-based lending company, faced down a class action law suit in 2008, and Fairplace, the first Brazilian P2P lending service was suspended in 2010 after a government investigation.

While disruptive services like P2P lending often face legal scrutiny the first time they are unveiled, the Cumplo team wonder whether there is more to the story than simply being the first P2P lending service in Chile.

According to Jean, interest rates on traditional bank loans can be as high as 60%.

Cumplo offers interest rates below 30%.

As a lending platform, Cumplo is unquestionably a threat to Chile’s conservative banking system, as it provides the first ever alternative to a traditional high-interest loan.

Cumplo's Felipe Lyon (left) assists Chilean start-up efizity's Cristian Wolleter (right) in getting a loan

Rallying Support from the Chilean Community

While the case is still being decided, Jean and the Cumplo team are confident that they can win.

The case has rallied the support of Chile’s rapidly growing entrepreneurial community.


In a letter to the persecution, former head of the Ministry of Economy Juan Andres Fontaine, head of Fundación Chile Alvaro Fischer, Chairman of the global investment bank Asset David Gallagher, and other notables asserted that discouraging Chilean entrepreneurs from venturing into peer-to-peer lending would be “foreign to the spirit of entrepreneurship.”

The letter was published in El Mercurio on August 1st 2012.

You can read the letter, and sign the petition here.

Changing the ecosystem for the better

The Cumplo team hopes that their case will open up the doors for fair competition within all industries in Chile.

“Entrepreneurs need space…they don’t want to change the world for the worse—[entrepreneurs] want to prove that they can change the system for the better. For that they need to have an opportunity. They can’t be sued.”