Traditionally, Latin America’s population has been underbanked. The explosion of financial technology (fintech) companies and startups in Argentina is changing that.
Fintech spurs development, competition, and financial inclusion – and Argentina is reaping all three of these benefits as its fintech sector grows.
Fintech is innovative and uses technology to improve how finance operates. Most importantly, fintech increases the number of people who can access financial services, which is especially important for a country such as Argentina with a growing consumer market.
Learn about the growth of fintech in Argentina and why your business should work to access Argentina’s growing fintech market.
1. Argentina’s Fintech Sector is Growing Fast
Compared to other countries, Argentina has a rapidly growing fintech sector. Argentina’s fintech growth far outpaces other regional economies. Argentina’s fintech sector grew by 67% in 2019, compared to:
- Columbia, which only grew by 29%
- Brazil, which only grew by 49%
- Mexico, which only grew by 51%
Other large economies in Latin America have not seen the level of fintech growth Argentina has.
Currently, Argentina has close to 300 fintech-focused firms.
One especially noteworthy Argentine fintech company is Ualá. Ualá was launched in October 2017 and allows users to conduct financial transactions by linking their mobile device to a prepaid Mastercard debit card.
At the end of 2019, Uala raised $150 million in funding and the startup is now valued at roughly $1 billion.
Fintech grown quickly in Argentina and will continue to be a major player in the company’s business environment.
2. Fintech Makes Argentina’s Economy Strong
Fintech has strengthened Argentina’s economy and will be an important part of the Argentine economy moving forward.
The Argentine fintech sector is directly responsible for bringing more of the country’s population into financial services.
It is estimated that nearly 50 million Argentines could have access to financial services because of Argentina’s fintech sector.
Any Latin American country that substantially increases the proportion of the population that has access to banking will be highly competitive.
When people have access to financial services, they are able to secure loans to finance starting businesses and securing education.
Stronger financial services also means that Argentina’s consumer market will continue to grow. The strong financial grounding provided by fintech will help individuals and families save money that can be used for greater purchases.
Overall, fintech is providing Argentina a significant economic boost and is making life better for Argentines and the businesses who want to sell products to them.
3. Fintech is Part of Argentina’s Broader Startup Culture
Argentina’s growth in fintech shouldn’t be surprising because of Argentina’s reputation as a startup hub.
Argentina’s strong startup culture spans several sectors, especially tech, education technology, and fintech.
Argentina also has a host of bitcoin-related startups and a strong foundation of cryptocurrency within the fintech and tech startup communities.
Much of Argentina’s startup-friendly atmosphere is the result of its entrepreneurship law. Through tax-incentives and other business friendly legislation, the Argentine government has demonstrated its commitment to small firms and innovation.
In particular, the entrepreneurship law guarantees that:
- Small businesses have the ability to raise capital to grow
- The government of Argentina can finance business growth alongside the private sector
- Local entrepreneurs can write off more of their taxes
- Public crowdfunding will be allowed and rewarded
- The government will promote accelerator programs across various sectors
Overall, Argentina’s government has passed arguably the most business-friendly policies in Latin America.
As fintech companies grow, they will do so with the support of the Argentine government, and contribute to Argentina’s strong startup culture.
Fintech Big Part of Argentina’s Future
Fintech will be a major part of Argentina’s business future.
Financial technology makes up a significant portion of the Argentine economy and increases the number of people who have access to finance in general.
Companies looking for innovative fintech firms should consider Argentina and its thriving consumer market.