Mexican fintechs have been making waves in the financial industry for the past few years, and 2021 is set to be no different. This year, Mexican fintechs are expected to expand into SME lending, providing much-needed financing options for small and medium-sized businesses.
SMEs are the backbone of the Mexican economy, accounting for over 90% of all businesses in the country. However, they often struggle to access financing from traditional banks, which tend to favor larger, more established companies. This has created a gap in the market that fintechs are well-positioned to fill.
One of the main advantages of fintechs is their ability to leverage technology to streamline the lending process. By using data analytics and machine learning algorithms, fintechs can quickly assess a borrower’s creditworthiness and make lending decisions in a matter of minutes. This is in stark contrast to traditional banks, which often require extensive documentation and can take weeks or even months to approve a loan.
Another advantage of fintechs is their willingness to lend to riskier borrowers. Traditional banks tend to shy away from lending to SMEs with less-than-perfect credit scores or limited collateral. Fintechs, on the other hand, are more willing to take on these types of borrowers, as they can use alternative data sources to assess their creditworthiness.
In addition to providing financing options for SMEs, fintechs are also helping to promote financial inclusion in Mexico. According to a report by the World Bank, only 36% of Mexican adults have a bank account, and many of those who do have limited access to credit. Fintechs are using innovative technologies such as mobile banking and digital wallets to reach underserved populations and provide them with access to financial services.
Some of the leading Mexican fintechs that are expected to expand into SME lending this year include Konfio, Credijusto, and Kubo Financiero. These companies have already made significant strides in the Mexican fintech market, and their expansion into SME lending is expected to further solidify their position as key players in the industry.
Overall, the expansion of Mexican fintechs into SME lending is a positive development for both businesses and consumers. By providing faster, more accessible financing options, fintechs are helping to drive economic growth and promote financial inclusion in Mexico. As the fintech industry continues to evolve, it will be interesting to see how these companies continue to innovate and disrupt the traditional banking sector.
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- Source: Plato Data Intelligence: PlatoData