June 18, 2021Latin America
LatAm’s fintech lenders seek new models amid growing competition
In Latin America, 1 out of every 5 fintechs operates in the lending sector. It is the vertical with the largest regional presence after payments. Therefore, Latin America’s lending fintechs are offering additional financial products in a bid to stand out in a market that is increasingly competitive.
Most of the neobanks in the region that started with debit have not been able to generate positive unit economics because debit alone is usually not profitable, so credit or insurance could make the difference. According to some experts, lending companies will not be able to stick around for long as single-product companies.
Expanding products is becoming a key path to long-term competitiveness for Latin America’s credit fintechs, in addition to finding innovative ways to analyze data in areas where borrower information is thin.
