How Fintech is Boosting Financial Inclusion in Latin America
Fintech - July 14, 2016
Business opportunities by mobile money based international remittances, P2P and micro payments are showing big potential in the Latin American market.
According to GSMA, mobile money based international remittances is the fastest growing product by transaction volume (+52%) for the second year in the row in Latin America.
A study from Juniper Research has found that international remittances, including airtime top-ups via mobile phones, will exceed $25 billion by 2018, up 67% from an estimated $15 billion in 2015.
Adopting Digital Financial Services in Guatemala
Carol Caruso - September 22, 2014
Guatemala presents great potential to advance financial inclusion through the adoption of digital financial services (DFS). Only 22 percent of the population has a bank account with a formal financial institution – in most cases one of the three largest commercial banks – while almost every Guatemalan household has a mobile phone (8.8 million unique subscribers among a total population of 15.5 million). Yet most financial transactions are still conducted at bank branches. The logistics challenge of reaching isolated rural communities results in high distribution costs for the banking sector, hence it is no surprise that in 2012 Fitch Rating described the banking system as highly inefficient.
Some innovation in delivering financial services has taken place in the last few years. A few banks have implemented agent networks and the three mobile network operators now offer mobile financial services. But the results achieved are far from what the players and the supervisory authority were expecting in terms of usage and increased financial inclusion. For example, the leading mobile money service, Tigo Cash, is being used by MFIs in a limited way. Instead of empowering clients to use the available mobile wallet, clients primarily use Tigo agents for cash-in/cash-out transactions. While this over-the-counter (OTC) service through an expanded distribution channel has benefits and works in nascent environments, it is far below the potential of DFS in Guatemala.
Brazil’s fintechs bank on more deals, less red tape
Nathalia Fernandes - July 06, 2016
Less bureaucracy in a country where everybody is just sick of it. This is the formula used by finance technology firms that aim to change the way Brazilians deal with their money. This is not a revolution exclusive to Brazil, as this article recently published on IDG Connect points out. But it is getting stronger and more robust in the country in the last two years. The country’s banking system is highly regulated and marked by a few very big, old-fashioned institutions that control most of the market. But change is on its way.
“The fintechs here in Brazil and around the world are presenting every day better solutions to challenge the traditional financial system,” Pedro Conrade, CEO and founder of local startup Controlytells me. “In Brazil, it is a movement that is still in its infancy if you compare with more developed markets, but the possibilities here are unbelievable. Today the amount of transactions in the hands of the big players is huge but I am convinced that it will fall in the next few years, mainly because of the startups. And the consumer, of course, is going to benefit from it.”
Trust and technology boost Colombia’s financial inclusion
Nathalia Fernandes - August 03, 2016
Finance technology firms are spreading fast all over Latin America. We have already analysed the Fintech revolution in Brazil and this week we are going to take a closer look at Colombia, the fourth biggest economy in the continent, behind only Brazil, Mexico and Argentina
Latin American Microfinance Must Embrace Innovation to Help Build Better Lives
Diana Taylor - April 08, 2016
Latin America’s financial institutions are microfinance and financial inclusion pioneers. Bolivia’s BancoSol was the first commercial bank focused on the base of the pyramid, helping establish a model that now serves 200 million people worldwide; in Mexico, Compartamos’ 2007 IPO remains the largest in microfinance’s history; and Peru has captured the top financial inclusion regulation rating for the last eight years.
Is Latin America’s innovator status fading? With only hundreds of high-quality microfinance institutions (MFIs) in the region, the industry has rarely needed to compete or innovate; in North America, thousands of banks fight to win and retain customers, and a host of emerging fintech players makes that competition even fiercer.