LatAm: Financial inclusion in LATAM - Konfio
According to figures from the World Bank, more than 2.5 billion people in the world are excluded from traditional banking services. These people are mostly in emerging markets. With Latin America considered one of the fastest growing middles class regions in the world, it is also becoming a prime market for innovation in the financial sector.
The fact that billions of people currently underserved by financial organisations has prompted growth of FinTech and payments innovation in these markets, with PayPal’s CEO Dan Schulman noting that “moving money should a right for all citizens, not a privilege for the affluent”. As such, visionary startups like Konfio in Mexico, have taken advantage of the internet expansion in LATAM to offer a lending platform for micro-businesses in the region who do not otherwise have access to credit or to affordable loans. Konfio, and other Fintech companies, are taking advantage of the vast range of data points available via a company’s online presence, rather than traditional credit reports, to evaluate credit risk.
Konfio CEO David Arana explained that “roughly 60 percent of Mexico’s population has access to the Internet with a whopping 93 percent of those with Internet access possessing an active Facebook account. On a global scale, about 20 percent of Facebook’s user base is in Latin America”. Amongst the banked population these numbers are even higher, with RFi Group data finding that 85% of Mexican retail banking customers currently perform banking tasks via digital channels.