In emerging economies such as those of Latin America, coupled with rising prices, the economic slowdown projects an unfavorable scenario with limited growth for companies, investors have become cautious and increases in central bank interest rates are causing a low demand for credit, and with it, they are undermining the investment possibilities for many companies.
Mexico is no stranger to this, but even in this scenario that paints to be little more than terrifying, a sector continues to project growth: fintech, and it is not that these companies are oblivious to the context, but that many of them have focused on a market, which although vulnerable, has a lot of potential: unbanked users and companies.
Finnovista’s Fintech and Incumbents Radar 2021 indicates that 59% of Mexican fintech users are individuals and companies without access to traditional banking, specifically the most worrying market in a context of crisis.
New Horizons
The value of fintech in terms of financial inclusion has been indisputable, services such as consumer loans; however, for this growth to be sustained, fintech companies need to translate their business models into profits to gain the trust of investors.
Recently, a company joined the list of long-awaited unicorns, another fintech, it is worth specifying. Its incorporation to the list of mythical companies is and will be key, not only because Mexico adds another unicorn, but also because its valuation is a reflection of the fact that fintechs, even in the face of the complex economic panorama, are companies that must be bet on.
For some years now, fintech companies have completely revolutionized the financial ecosystem. They develop innovative products and services with a development focused on technology to improve their user acquisition and a total commitment to the customer experience based on their individual and collective needs. Furthermore, fintechs have offered the possibility of stronger financial inclusion, particularly in countries with low rates of banked populations.
Fintech turned to look at demographics practically forgotten by traditional institutions: women, rural populations, young people and, above all, the people who are in charge of SMEs, which are the economic backbone of the Latin American region.
They have paid to close important gaps and, in times of crisis like the current one, they become genuine lifesavers for millions of people and companies, to the extent that they allow them not only to survive, but even to project growth for the most hopeful future.