Latin America sees boom in FinTech investment in Q2 fueled by neo banking deal activity

Latin American companies recorded huge growth in FinTech funding through the first half of 2021. Total capital invested at mid-year reached an all-time high of $7.6bn exceeding 2020’s total of $2.9bn. Funding has more than doubled compared to 2020 and is driven by sizable investments over $50m.

The growth in Latin America’s FinTech adoption and demand can be attributed to the notoriously low adoption rates of financial services among consumers and Covid-19 induced acceleration for digital payments.

Moreover, marketplace Lending companies hold 21% of deal activity this year. The severe banking crisis and heated economy has led to a huge latent credit demand, both from individuals and SMEs. Additionally, high unsecured overdraft payments, credit card fees, and high borrowing costs from banks have shifted consumer demands to more affordable and easy lending platforms.