One in Three Loans in Argentina Granted by a Fintech Company

In a complex economic context with a low level of financing for the entire economy, fintech credit represented 1 in every 3 loans granted to individuals, reaching a universe of 5 million Argentines. But in terms of financial inclusion, the central data is not the quantity of these credit takers but rather the quality: almost 90% of them have medium and low income levels with little chance of accessing other sources of financing.

Of a total of just over 9 million loans to individuals, 3 million were supplied by the fintech sector, while the remaining 6 million were distributed among banks, mutuals, non-bank cards and other actors in the system.

If you want to read more about the loans granted to Argentinians by fintech companies, and read the latest financial news of the day, download the Born2Invest mobile app.

Why people in Argentina turn to fintech companies when it comes to loans

Of those 5 million credit takers covered by fintech companies in 2023, 59% do not have a blank job and 40% had their first credit experience in this way, which reaffirms the presence of the role of technology companies within a segment. economic-social in which traditional banking has very low incidence.

Receiving the first loans also begins to create each person’s credit history, which allows them to better qualify for future financing and, thus, access better conditions. 36% of those 5 million people lacked that background in the financial system.

The data corresponds to a study by Equifax Argentina based on the latest data available from the BCRA, which covered the second half of 2022 and the first half of 2023

Among fintech credit takers, 87% are within the population ranges with medium to low salaries. If loan recipients are divided into 8 levels based on their income, levels 6, 7 and 8, the lowest, represented 59% of the financing.

According to the study, when requesting loans, 45% did so with repayment terms of more than one year, 30% did so within one year and 25% did so with less than one year. There were more women than men who requested loans: 52% versus 48%. At the generational level, 48% of customers are between 25 and 40 years old (Millennials), 23% between 41 and 56 years old (Generation X), 22% were people between 19 and 24 years old (Generation Z), a 6% between 58 and 76 years old (Baby boomers) and, with a presence of less than 1%, those over 76 years old.

“The impact that fintech has generated in terms of financial inclusion is surprising. Just three years ago, just over half a million people had a loan from a fintech. Today it is almost ten times that figure,” said Ignacio Plaza , president of the Argentine Fintech Chamber .

“We have the most appropriate channels for the distribution of value and credit. With macroeconomic stability and appropriate regulation, the fintech industry will become the most efficient mechanism to leverage economic growth,” he added.

From Equifax, its director Gabriel García Mosquera highlighted the age factor in this credit segment implemented through technology: “Millennials are clearly at the center of the scene, and generations like Centennials will have an increasing influence on how this type of thinking of products”.

3 out of 10 users never go to a branch

At the same time that more people are turning to financing via fintech, the public in that segment builds a different profile from the traditional user and uses electronic channels more frequently. This was highlighted by a survey carried out by the fintech company Moni among 2,400 of its clients who also have an account in a bank. From there, it was concluded that 3 out of 10 users claim to never go, for any reason, to do a procedure in person at a bank branch.

The study shows that 59% of those surveyed go to the bank in person only in exceptional situations, while 33% indicated that they manage themselves exclusively through channels and never go to their bank and only a minority 8% of the The population regularly attends the branch to resolve all their needs in person.

“The survey allows us to conclude that attendance at bank branches continues to decline in user preferences and the use of channels such as homebanking, the mobile application, the telephone service line or chatbot and the ATM grows,” the report explained.

Regarding these results, Juan Pablo Bruzzo , CEO of Moni, stated: “Although some cultural patterns associated with the use of face-to-face channels are still ingrained, we see that the popularization of virtual wallets and digital financial services continues to break barriers, making “Both banks and fintechs are increasingly competing for clients who definitely prioritize the use of virtual service channels.”

The survey also goes into depth about the channels or tools most frequently chosen by the sample participants to pay for services such as electricity, gas, water, internet, telephone, cable, taxes, among others. In this sense, 62% claim to pay service bills through digital payment methods, such as virtual wallets and online platforms , while 23% prefer to pay for services through automatic debit. At the opposite extreme, there are still Argentines who prefer to pay for services in person. Thus, 13% choose to pay for their services at non-bank payment locations, such as Rapipago or Pago Fácil, among others; 1% prefer to continue using the ATM and the remaining 1% continue to prefer to pay for services at their bank’s cash register.

“These data confirm that fewer and fewer Argentines use their bank in person on a daily basis and a sustained growth of virtual channels for paying for services, largely due to the additional boost generated by the pandemic, taking into account that In measurements carried out by the company in June 2019, a majority of 40.3% of Argentines still paid their bills in physical locations,” Bruzzo added.

__

(Featured image by Towfiqu barbhuiya via Unsplash)

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 infobae. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals 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