Technological advances in Latin America are taking place at an unprecedented rate, and this is most clear in the fintech sector. Fintech is a portmanteau of “financial technology”, and as such refers to software that is used to enable and support financial services. Fintech aimed at small and medium businesses has experienced much greater growth than that aimed at large businesses, and there are multiple factors affecting that.

Brazil in particular is an excellent place for the development of fintech because of the high equity returns enjoyed by its major banks – these can reach up to 20%. Just five of the major banks control some 90% of the money in Brazil, meaning that it is very difficult for new businesses to break in. However, they primarily cater to a wealthy sector of the population, as great proportions of people are not affiliated with a bank in some areas of the country and prefer to use cash. Many small business owners in the region have therefore struggled in the past with finding financial systems that will work for as many clients as possible, and fintechs catering to small business owners have found a lot of work in this area.

One example of a fintech company catering to small businesses is Cora, which is based in Brazil. Having noticed the gap in the market for fintechs that do not only work with wealthy clients, the two co-founders of the company started engaging with customers. Cora is now valued at nearly $30m, and hopes to expand globally.

Source: www.forbes.com