Thursday , June 1 2023

Only in the year, Fintech in Latin America grows 66%


Fintech 03

The information from the second edition of the Fintech report in Latin America 2018, developed by IDB and Finnist, can not be more positive: 1166 Fintech startups have been identified in the region, reflecting an increase of 66% from the first measurement in 2017, the year in which 703 enterprises were identified .

Two of the three ventures are already in advanced stages of development, and Fintech activity has grown from 15 to 18 countries last year. Brazil is the country that contributes to the largest number of companies with 380, followed by Mexico with 273, Colombia with 148, Argentina with 116 and Chile with 84 (FinteChile talks about 90, although it considers different dates of research, where months make a difference).

Fintech graph

In any case, Chile is a country in the South American region with the largest concentration of Fintech by population density, and in particular has reached 4.17 enterprises per 1 million inhabitants, more than 2.78 presented by Mexico and 2.5 million. Colombia and Argentina, according to FinteChile, an association that represents and strengthens the Chilean Fintech industry.

"This is the tip of the iceberg that only promises to continue accelerating in the coming years, reflected not only in the increase of actors who are part of the Fintech ecosystem since its foundation, but also the financial institutions that interact with them, but other actors as investors local risk capital, "said Juan Miguel Tirado, regional marketing director at Gosocket, a company that actively participates in Fintech through electronic factoring.

Indeed, financing of invoices represents 10.4% of the number of solutions present, and the solutions for lending and issuing money are the majority:

Other spheres of this growth and segments

This explosion of the Fintech solution has other manifestations: one of three companies declare that they have expanded their operations beyond national borders.

Fintech Graph 2

"While five countries account for 86% of Fintech's companies in the region, ventures have been identified in each of the Latin American countries and a growing trend towards internationalization, which shows the opportunities entrepreneurs perceive, but also the importance of continuing to strengthen dialogue and harmonization at the regional level," commented Juan Ketterer, Head of IDB's Link, Market and Finance Sector.

The main business segment continues with payment and remittance, representing 24% of identified enterprises (a total of 285), followed by a credit segment (18%) and business finance management (15%). It also highlights the rapid growth of segments of digital banking and, in particular, the evaluation of loans, identity and fraud.

Money remittances and payments have a strong presence due to the penetration of intelligent mobile equipment into the population, and the high rate of exclusion of the population from the official financial services circle has had an impact on their growth due to lack of account.

As for loans, companies are increased as a result of costs, bureaucratic obstacles and high interest rates of traditional financial institutions. In the meantime, corporate finance management has favored new opportunities for SMEs representing 90% of Latin America and the Caribbean.

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