The high costs of access, high interest rates, lack of products and services that provide value to users, and the confusing user experience are among the main factors which make the financial industry one of the least appreciated by users—especially in regions such as Latin America and the Caribbean.

In fact, 71% of millennials prefer to go to the dentist rather than interact with their bank, and most do not know how to identify the differences between their bank and another, according to a Scratch survey published by Spanish-based bank BBVA .

Latin America and the Caribbean have a high rate of financial exclusion. Around 210 million people, equivalent to 46% of the adult population, do not have a bank account. Also, small and medium-sized companies in the region (SMEs)—which account for 90% of all companies—have difficulty accessing credit, mainly due to lack of credit history or liquidity.

Fintech against financial exclusion

However, this scenario of financial exclusion could change thanks to the rapid technological development, quick internet penetration rate the region is currently experiencing. According to the report of Economía Móvil 50% of the population in Latin America already has access to mobile internet in 2018, which is expected to steadily grow in the near future.

The fintech companies are taking advantage of these two factors —internet penetration and technological development— in order to lead the transformation of the financial sector, offering more efficient processes, new models for obtaining credits and mobile applications that benefit individuals, SMEs and even the traditional financial entities themselves.

The second edition of the Fintech Report in Latin America 2018, conducted by Capital Markets and Financial Institutions Division of BID and Finnovista, identified 1,166 Fintech ventures in the region, an increase of 66% over the previous year.

Related Article: Why Fintech Startups Are Rapidly Becoming Unicorns in Latin America

fintech Latin America

Some successful examples of fintech companies are online loan platforms for small businesses. They carry out alternative credit risk ratings to those used by ordinary banks, and facilitate the development of new businesses or ventures that otherwise would not have received any money.

In addition, the report found that 46% of the fintech companies’ mission is to offer solutions to the market of consumers and SMEs, since they are the segments that are most under-served by traditional banks. And in countries such as Bolivia, El Salvador, Honduras, Nicaragua, Panama and Paraguay, 100% of fintech ventures said their main customers are either final consumers and/or SMEs. 

“I am fascinated by the possibility of making a difference in the lives of thousands of people, that our solutions democratize opportunities for folks who are most in need, so that real financial inclusion be made,” says María Laura Cuya, founder of FactoringLab, and CEO of Innova-funding, a fintech startup that operates as the first marketplace in Peru, connecting investors and companies.


The fintech industry in Latin America and the Caribbean is still young, and it will be necessary for both the public and private sectors to work together to promote its consolidation and growth.

In the public sphere, governments of the region are aware of the potential fintech industries have for developing their economies. Mexico, for example, is the first country in the region that already has a law which regulates financial technology institutions , allowing legal certainty and establishing a framework that ensures fair competition between fintech and traditional banking institutions.

In the private sector, entrepreneurs and key players are joining forces, creating partnerships with the objective of generating information and good practices to promote fintech culture among consumers and investors, regulators and entrepreneurs.