(Expansión) – At this stage of the game, the word crisis is drawn again in the media and in the meetings of businessmen and investors; and is not for less. More than two years after the pandemic began, we believed that this concern in the face of an abrupt change in economic dynamics would not arrive for a long, long time. This year began with certain complexities and everything indicates that the rest of 2022 and the beginning of 2023 will be an extremely challenging period.
We have all witnessed the increase in prices, mainly of food and other basic products and services, but this is only the first symptom.
In emerging economies such as those of Latin America, coupled with rising prices, the economic slowdown projects an unfavorable scenario with limited growth for companies, investors have become cautious and increases in central bank interest rates are causing a low demand for credit, and with it, they are undermining the investment possibilities for many companies.
Mexico is no stranger to this, but even in this scenario that paints to be little more than terrifying, a sector continues to project growth: fintech, and it is not that these companies are oblivious to the context, but that many of them have focused on a market, which although vulnerable, has a lot of potential: unbanked users and companies.
Finnovista’s Fintech and Incumbents Radar 2021 indicates that 59% of Mexican fintech users are individuals and companies without access to traditional banking, specifically the most worrying market in a context of crisis.
New Horizons
The value of fintech in terms of financial inclusion has been indisputable, services such as consumer loans; however, for this growth to be sustained, fintech companies need to translate their business models into profits to gain the trust of investors.
Recently, a company joined the list of long-awaited unicorns, another fintech, it is worth specifying. Its incorporation into the list of mythical companies is and will be key, not only because Mexico adds another unicorn, but also because its valuation is a reflection that fintechs, even in the face of the complex economic panorama, are companies that must be bet on.
For some years now, fintech companies have completely revolutionized the financial ecosystem. They develop innovative products and services with a development focused on technology to improve their user acquisition and a total commitment to the customer experience based on their individual and collective needs. In addition, fintechs have offered the possibility of stronger financial inclusion, particularly in countries with low rates of banked populations.
Fintech turned to look at demographics practically forgotten by traditional institutions: women, rural populations, young people and, above all, the people who are in charge of SMEs, which are the economic backbone of the Latin American region.
They have paid to close important gaps and, in times of crisis like the current one, they become genuine lifesavers for millions of people and companies, to the extent that they allow them not only to survive, but even to project growth for the most hopeful future.
Beyond the crisis
Inflation in the United States is already over 9% at an annual rate. This has the markets and investors concerned, something that is already reflected in the levels of investment in venture capital for startups -including fintech-, especially towards Latin America. But at a time like this it is ideal to continue betting on them. Its value for the survival of companies and the economic solvency of families in the region is too great to ignore. There will be life after the crisis and even in difficult times you must plan for the long term.
The fintechs that manage to build a solid model will be the shield against the coming crisis, also the great leaders of this moment and the spearhead for a new generation of companies that survive in the face of catastrophic scenarios and that support the survival of others, at the same time that they support the economy of families.
Editor’s note: Sebastián Medrano Gallo is an economist and specialist in fintech issues. Follow him on . The opinions published in this column belong exclusively to the author.
