In the last decade, Latin America has gone from being a market with high financial exclusion to a global epicenter of fintech innovation. The growth of financial startups, the massive adoption of digital services, and clearer regulatory frameworks have created a favorable environment for fintech lending (digital platforms that originate, manage, or finance fintech loans).
These solutions are aimed at underserved segments such as microenterprises, people without a credit history, and SMEs. This transformation not only opens opportunities for profitability but also presents a social value proposition: greater access to credit and, therefore, more financial inclusion in LATAM.
Global and regional context of Fintech loans
Growth in Latin America
Between 2017 and 2023, the region went from having a few hundred fintechs to more than 3,000 companies, with Brazil, Mexico, and Colombia leading in creation and financing. This boom is driven by factors such as:
- High penetration of mobile devices.
- Great need for financial services in the unbanked population.
- Growing attraction of venture capital to startups.
Nevertheless, moderate economic growth and high capital costs in the region still condition the profitability of many fintech lending models.
Global overview
On a global scale, the demand for digital credit solutions is expanding thanks to tools such as alternative scoring (mobile, consumer, and transaction data) and process automation. These innovations reduce costs and accelerate credit approval, making fintech lending a serious competitor to traditional banking, especially in microcredit and consumer lending.
Financial Inclusion and Impact Investing in Latin America
Advances and gaps
The indicators of financial inclusion have improved, but a significant gap still remains: millions of people have bank accounts and access to digital payments but lack access to formal credit. International organizations such as the World Bank and the International Monetary Fund highlight that, although digitalization has reduced exclusion, the expansion of credit depends on the scalability of fintechs and on solid regulatory frameworks that provide confidence to consumers and investors.
The case of Tala in Mexico, which raised financing lines to expand its operations, illustrates investors’ appetite for supporting digital portfolios with evidence of performance and risk control. This type of operation validates impact investment models that channel debt into loans originated by fintechs.
The role of Mitrax Latam Fintech Lending in the region
Mitrax, through its Private Equity Fund Latam Fintech Lending, channels capital toward credit fintechs, aiming to combine financial returns and social impact in the democratization of credit access.
The fund invests in debt and/or equity of fintechs that serve underserved populations and offers investors participation mechanisms with periodic payments (quarterly distributions, according to its FAQ).
Benefits for investors
- Access to scaled origination: Exposure to portfolios without the need for direct operational know-how.
- Measurable impact: Financial inclusion metrics along with financial KPIs.
- Structured liquidity: Periodic returns and institutionalized exit routes.
Fintech lending in LATAM represents an opportunity with dual potential: financial profitability and financial inclusion. Technological, demographic, and regulatory factors favor its sustained expansion, although its consolidation will require progress in governance, risk management, and access to institutional capital.
In this context, initiatives such as Mitrax’s Private Equity Fund Latam Fintech Lending offer investors structured access to the market, allowing them to leverage the growth of digital credit and contribute to strengthening financial inclusion in the region.
Source: Inter-American Development Bank & Finnovista. (2023). Fintech in Latin America and the Caribbean: A consolidated ecosystem for inclusion and investment. [https://publications.iadb.org/es/fintech-en-america-latina-y-el-caribe-un-ecosistema-consolidado-con-potencial-para-aportar-la]
