Argentina Fintech ecosystem and Regulation
Argentina Fintech
Argentina Fintech ecosystem has been growing in line with the Latin American ecosystem. Is the 3rd country in terms of capital invested in Fintech, with a total of 150 million and it´s also the 3rd country with the highest number of Fintechs in Latin America, behind México and Brasil. Furthermore, the largest sectors are payments and lending (32 Fintechs) and by 2020, there were 270 fintechs in Argentina (Argentinian Fintech chamber, 2020), of which 79% were created in the last 6 years. Currently there are over 302 Fintech in Argentina of which 20% were created during pandemic (Ambito, 2021)
In the case of the lending sector, only between 2016 and 2018, there was a growth of 138% and currently lending fintechs represent 24% of total fintechs making it the largest category. The Argentine credit market stands out for having three types of financing FinTech (EY, 2020), which are those that use their own capital, those that are funded with a risk capital and those that offer platforms to interconnect demand and supply (Crowdlending)
The high demand of lending fintechs is mainly due to the existing financing gap in the country, which has led more people and companies to request credit from Fintech companies. Lending fintechs have been growing over the years and only during 2017, they granted loans for an average amount of 250,000 Argentine pesos with terms of between three and six months (Argentinian Fintech chamber, 2020).
Regulation
In 2020, the Central Reserve Bank of Argentina defined as “Other Non-Financial Credit Providers” (OPNFC) to companies that, without being financial entities, carry out – as a main or ancillary activity – offer of credit to the general public , routinely granting financings reached to people (human and legal) both for the purchase of goods and / or services and without a specific destination. This definition includes Fintech credit companies, credit card issuers for financing that is not governed by the Credit Card Law.
This implies that the OPNFC must comply with 3 rules, which currently apply to financial institutions: the rules on publicity and transparency in matters of interest rates (“Interest rates in credit operations”), on “Protection of users of financial services” and on “Communication by electronic means for the care of the environment ”. Likewise, they must comply with the informational transparency and claims regimes that currently regulate the rest of the banking system (Economia, 2021)
Given the importance that OPNFCs have acquired in recent years, it is to be expected that new regulations will continue to regulate
Lending Fintech
Afluenta is one of Argentina’s top lending Fintech companies. It is the first P2P lending network in Latin America. It allows people to borrow up to $75,000 for a loan tenure spanning a maximum of 48 month. It was founded in 2018 and currently has a funding of over USD 10M (Tracxn, 2021). It has over 2 million of customers and 1B in credits (Afluenta, 2021)
Microfinance in Argentina
In terms of microfinance institutions, Provincia Microcreditos is one of the top companies in Argentina. For more than 10 years, it has provided financial services and comprehensive advice to workers and independent workers in the Province of Buenos Aires. There are more than 5 types of credits offered and since September 2021, the option to accept a loan from Provincia Microcredits through Internet Banking Provincia BIP is already available. So far in 2021 it has granted 18,945 loans for $ 2,753 million (Provincia Microcreditos, 2021).
