Fintechs Filling Underserved Needs in Latin America and Caribbean
Miami, FL | January 16, 2020
New report by Mastercard and CB Insights analyzes five trends on how new fintech startups are transforming the global market for underserved consumers and small & medium sized businesses in 2020
Financial Technology startups are beginning to transform the world of finance in curiously unique ways around the world. Across the globe, these cutting-edge FinTech companies are looking to operate at scale, increasingly embedded within everyday financial experiences. During 2019, these companies experienced significantly more funding than in 2017, a sign that 2020 is likely to be a big one for global FinTech adoption. CB Insights in partnership with Mastercard Start Path has released a report on five major global FinTech trends, focused on five different geographies. Called “FinTech in 2020: Five Global Trends to Watch,” the report examines North America, Europe, Asia Pacific, Latin America & the Caribbean (LAC) and the Middle East & Africa.
Within LAC, newly emerging FinTech lending startups are transforming how the region’s consumers and SMBs access loans. FinTechs are lending to long underserved borrowers, making LAC a focal point for innovative funding methods. Among the region’s new companies is Brazil’s Creditas, with disclosed funding of $312 million. Mexico’s Credijusto has a disclosed funding of $152 million and says it originated over $70 million in loans as of March 2019. A smaller startup is Colombia’s Sempli, with a disclosed funding of $17million. Opportunities for expansion are heightened especially for Colombia, which is LAC’s third-largest SMB lending market.
Even with fragmented regulatory efforts evolving at different rates, some markets remain proactive when compared to others. For instance, Mexico enacted the FinTech Law granting companies legal standing and guidelines in March 2018. In April 2018, new Brazilian regulations let FinTech firms provide peer to peer (P2P) lending services. While 45 percent of LAC’s FinTech entrepreneurs referenced current regulation as “very loose” or non-existent in a 2018 International Development Bank and Finnovista survey, investors still see opportunity. Top 2019 investors include Argentina’s Kaszek Ventures and Brazil’s Monashees, joined by United States companies Goldman Sachs, QED Investors, and Redpoint Ventures, and Japan’s Softbank announced a $5 billion LAC focused tech fund in 2019.
The world's most promising startups and FinTechs today move like Mastercard – in microseconds. Through the award-winning Start Path program, Mastercard enables later-stage tech startups to rapidly scale through unparalleled access to its technology, solutions expertise and partners around the world. The impact of these efforts is being seen in Latin America and elsewhere as many of the new startups grow and gain access to new sources of funding. LAC FinTech startups should thrive into the future in this emerging market, providing benefits toboth consumers and businesses.
To learn more about these trends and insights in LAC and across the globe, access the full report here.