Nearshore Americas

Fintech Boom in LATAM & Caribbean Created Nearly 2,500 Startups in Five Years

The fintech ecosystem in Latin America and the Caribbean (LAC) experienced a remarkable 340% growth over the past five years, leading to the creation of nearly 2,500 startups.

According to a study by the Inter-American Development Bank (IDB), the majority of these fintech companies are based in Brazil, Mexico and Colombia.

Countries like Peru, Ecuador, and the Dominican Republic are also seeing big growth. These countries, along with Uruguay, Costa Rica and Guatemala, are growing quickly, with an average of 44% growth each year since 2017.

Many of these fintech firms focus on serving the region’s unbanked population, integrating millions into the banking system for the first time.

Currently, 57% of fintech companies are targeting the unbanked population, up from 36% in 2021.

The most common types of fintechs in the region focus on payments, remittances and loans. However, there’s a growing number helping businesses manage their finances.

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“The report’s findings reaffirm the enormous potential of financial technology to close financial inclusion gaps in the region,” said Anderson Caputo, chief of the IDB’s Connectivity and Finance Division.

Despite the impressive growth, fintech companies face challenges such as scalability and access to funding. Although fintechs captured 43% of all venture capital in the region between 2021 and 2022, they continue to seek additional funding to expand their operations.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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