Monday , October 3 2022

Mexican Fintechs is attracting foreign investment


The increase in smartphone numbers, the creation of new businesses and the increase in digitization has increased the interest of businessmen in investing in Latin American projects over the last four years, and Mexico is one of the countries that has been the most magnet for such investments, especially in the fintech market.

According to Finnovist and the American Development Bank (IDB) report on the market position of fintech in 2017, 65% of Mexican companies received foreign investment in the fourth region. , below Chile, Brazil and Venezuela.

Ernest Leal, president of the Fintech Association of Central America and Caribbean, said that one of the reasons why more and more foreign investment comes to Mexico's technology is linked to other markets such as the United States Countries and Europe. they are already saturated and the region still has little access to capital.

"It was observed how financial innovations expand their borders and enter new, less developed markets with a wide range of opportunities to explore," says the cited report.

The document clarified that fintech is one of the sectors in which this external capital is most at stake, and in which Mexico ranks as the second country in which the region's fintech companies are established, only behind Brazil.

By 2017, Latin America has registered a total of 1166 Fintech new companies, of which Mexico has concentrated 33% of the total.

In the general pan-Latin American business situation, between 2012 and 2017, the presence of foreign investors more than doubled, and only in 2017 it was in terms of a new number of investors.

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"25 international investors debuted for the first time in Latin America in 2017," cites the IDB and Finnovist report.

After Brexit, the United Kingdom goes to Mexico

One of the countries that has seen Mexico as an investment destination for Fintech is the United Kingdom, in particular after the Fintech Law was approved in 2018.

The British Embassy's fintech and commerce director Rory O & # 39; Kane In an interview with Expansión, said the law provides the necessary legal certainty to encourage more British investors to bid on the fintech market in Mexico.

"The Mexican market has, to a large extent, evolved to ensure this legal certainty. By means of this regulation, they now have the opportunity to continue to invest calmly. There are no regulations in other companies, and this is not something that can not be done, but risks are higher, and this is the case with the population. income, "said the diplomat.

Kane explained that British investors, some of the fintech segments that are most likely to be most interested in Mexico, are digital money transfers, payments and money interception services, as they are some of the most successful in the United Kingdom.

According to Finnovist, in today's Latin America, fintech's payment and remittance segment is one that monopolizes investment with 24%, followed by loans with 17.8% of financial management companies in a third country with 15.5% of the industry.

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The diplomat warned that following the Brexit process, which means the UK's exit from the euro area, the future strategy is to focus on international trade rates in which technology plays a central role.

"With the departure of the UK from the European Union, teams have been set up to provide a better transition, and one of them is focused on international trade. (…) The markets developed by Fintech may already be slightly saturated, but for companies that want to keep pace with growth. , has to go outside the UK, and Mexico is an opportunity, "he said.

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