Although investments in the Mexican fintech sector registered a balance of around $1.3 billion, this amount is low considering the size of the market and the ecosystem in the country, revealed a report on the sector for Latin America prepared by the company KoreFusion.
“Despite its size and a highly promoted fintech law, financing in Mexico is less than the market should sustain,” it’s written in the report.
If you want to find more details about the report on fintech investments in five Latin American countries, and to find why in some countries fintech companies didn’t manage to raise important amounts of money, download for free the Born2Invest mobile app. Our companion app brings you the most important financial news in the world for you to stay informed.
Five countries in Latin America were included in the report
The report covers five countries: Brazil, Mexico, Colombia, Chile, and Argentina. With the information gathered, and despite the difficulty in recording investment amounts, since not all of them handle it, a total of $8 billion of financing for the fintech sector was recorded in the five markets considered, which are the main ones in the region.
Of these, just over $6.2 billion are for Brazilian fintech companies; while in Mexico the amount was around $1.3 billion; in Colombia $284 million; in Argentina $295 million and Chile $11 million.
The report pointed out that a lower financing in Mexico for the sector is due to the fact that the greater presence of foreign technological finance companies increases competition and dissuades investors from being interested in local competitors.
It also considers that national funds are conservative and prefer foreign companies that are not operating in the fintech sector. Moreover, another reason it refers to is the dominance of international banks that favor their innovation efforts outside the country.
The report considers that financing for the fintech sector in Mexico could be higher as a percentage of GDP.
Some examples of investments made in the Mexican fintech sector mentioned in the document are: in Konfio in December 2019 for $450 million; in Credijusto for $253 million in March 2020; in Alpha Credit for $125 million last January; and in Clip for $147 million in March 2019, among others.
In this regard, it is worth noting that six fintech companies in Mexico represent nearly 80% of all reported financing. According to the report, among the best financed companies in the region, 12 are in Brazil, eight in Mexico, three in Argentina and two in Colombia.
Credits and payments, the most financed
The report “Fintech Latin America 2020”, highlighted that payments, loans and digital banks, are the categories in fintech with the largest amount of financing with almost all investments.
This is due, the document explained, to the fact that currently, cash represents 83% of retail payments. In addition, 60% of the region is unbanked, so it is in these areas that they see the greatest possibilities.
In Mexico, this is not the exception, and the fintech companies specialized in loans, payments and digital banks are also the ones that receive the greatest investments.
According to the report, Mexican payment fintech companies recorded an investment of $942 million; payment fintech companies $207 million and digital banks $98 million.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in EL ECONOMISTA, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Money Pages Are About to Rock Google SERPs in a Very Big Way
This week, CXSports launched a new product called Money Pages, and they're about to make a big splash on Google...
Online Supermarket Tulips Raises 3M in a Week in its Second Equity Crowdfunding Round
Tulips has already launched four dark stores at Forlì-Cesena, Rimini, Ravenna, and Bologna, and is planning to expand throughout Italy....
What is the Purpose of a Business Website?
If you’re wondering how to increase website traffic, or asking yourself, “What is the purpose of a business website?” then...
Bancassurance: Savings Banks Join Moneymeets
Sparkasse Koblenz, Sparkasse Duisburg and Stadtsparkasse Wuppertal are now investing in a competing solution. Specifically, the alternative solution comes from...
Digital Cannabis? Rapper Snoop Dogg Plans to Create an Online Cultivation Farm
Snoop Dogg will invest in a digital cannabis farm. The singer's new business is not his first, Snoop has other...
Cannabis2 weeks ago
WeedFest Hemp Fair to Take Place in Warsaw on May 28-29
Business of Sports2 weeks ago
Amateur Sports Leagues Win Big as FOXD Network Partners With CXSports
Business2 weeks ago
What is the Best Social Media for Your Business?
Featured2 weeks ago
Stock Markets Have Definitely Seen Better Days