Crowdfunding Fintech Companies in Mexico Increased their Credit Placement by 32%

Crowdfunding fintech companies authorized to operate in Mexico increased credit placement among their clients by 32% annually at the end of March, according to Banco de México (Banxico).

According to data from the central bank’s Financial Stability Report, the YotePresto platform led the placement with 199.2 million pesos.

Prestadero granted 40.6 million pesos, followed by Doopla, with 29.8 million; Red Girasol, with 17.9 million and Likideo, with 8.87 million pesos. Banxico omits some institutions that do not report their data frequently.

In the report, the entity noted that the so-called Instituciones de Fondeo Colectivo (IFC) could boost financial inclusion by improving access to credit through their algorithms for analyzing applicants.

However, Banxico warned that some of these platforms continue to experience default problems, with delinquency levels close to 30%, up from 25% in the previous report published in December.

It is important to follow up on the business models and strategies to attract investors to these institutions, given the challenges they may face in the current environment of high-interest rates.

For the central bank, this tightening of financial conditions derived from the low growth and high inflation environment may threaten the Financial Technology Institutions (FTIs) sector -to which FTIs belong- as a whole.

The central bank notes that while IFCs have relatively small capital levels compared to banks and do not represent a source of systemic risk, their capital size represents a larger proportion compared to financial intermediaries such as Sociedades Financieras Populares (Sofipos) and Sociedades Cooperativas de Ahorro y Préstamo (Socaps).

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14 fintech companies in Mexico have obtained endorsement so far

Banxico noted that several fintech companies have continued the process of institutionalization and formal integration into the financial system by obtaining the endorsement of the National Banking and Securities Commission (CNBV).

The report detailed that as of May of this year, 58 authorizations to operate under the FTT figure have been issued to 22 IFCs and 36 to Electronic Payment Fund Institutions (IFPE).

Of this list, 14 fintech companies obtained their endorsement so far this year, with crowdfunding platforms such as Monific, Expansive Realty, Capital Funding Lab, Ucombi, Inverteca, and Snowball; the other eight are IFPEs: Mozper, Edenred, Klar Pagos, Sí Vale Fintech, Alto Azareo, Sylon Capital, UBR Pagos México and Neritopay.

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