In Payments

Paula Guelfo

Affiliate Consultant

Americas Market Intelligence

Those of us involved in fintech, banking, or the financial sector as a whole, understand that credit is one of the most profitable verticals, but what are the barriers it is up against today?

Whether we are talking about loans, credit, BNPL, or credit cards, we are looking at a market of almost one trillion dollars. However, there is still a long way to grow in Latin America. Let’s look at some facts. Of the region’s 641 million inhabitants in 2021,[1] it is estimated that:

  • Only 99 million have a credit card
  • Some 169 million people do have a debit card, but not a credit card
  • 117 million people are unbanked

The big question is why, in 2022, following a global pandemic that accelerated the digitalization of finances in an unprecedented way, there are so many gaps remaining. The answer needs to be addressed from the perspectives of both supply and demand.


Estimates put the percentage of adults with a credit history in the region at just 30%.[2] How can financial institutions and fintechs offer financing to people about whom they have no data? This financial invisibility means that people are being left out, and also that companies are missing out on reaching new audiences. We are talking about millions of people lost to the sector.


In addition to access, financial inclusion means proper use of the products. Credit is a tool, and as such, it can create good or bad momentum to the economy of end users, especially when there is a lack of financial education. Many people, out of fear, prefer not to use these products. And even if they do, retention becomes a mammoth task.

Last November 2, at the Argentina Fintech Forum, during the panel on lending, there was a lot of talk about post-sales credit services, and on providing solutions to enhance people’s financial lives as a key aspect of customer retention and loyalty. But this is only possible with the right information to offer suitable products. All of this is closely tied to hyperpersonalization, which, although it is a growing trend, cannot be implemented without data. So…

how much is the industry losing simply because of its lack of knowledge of “the invisibles”?

According to data from Global Findex 2021,[3] though the proportion of adults with at least one bank account in Latin America is upwards of 50%, in all cases:

Let’s observe what happens to those who applied for some kind of loan from a financial institution or fintech:

The difference between people who have access to an account and people who formally applied for a loan is clear:

  • In Argentina, Brazil, Colombia, Ecuador, and Paraguay, the gap is around 40%
  • In Bolivia it is close to 50%
  • In Venezuela it is nearly 75%

And the way to narrow these gaps is by simply knowing people, providing them with products that really improve their lives, who will then opt to use the service or product again. The metrics, for increasing adoption, should be the impact of credit rather than its placement. And for that the people need to be known, so that they can be offered the products they need, when and where they need them.

Open banking and open finance are the vehicle to make this happen, where the benefits will be for all. People who are financially healthy are better payers. If they are provided with personal financial management tools, they will come back to the products again, and be encouraged to try new ones. We are talking about millions of people and millions of dollars in revenues to serve not only those who are already banked, but also the 70% of Latin Americans with no credit history, and who, because of that, are currently invisible to the system. It is no longer a question of whether the data are shared, but of when and how. Those taking the initiative will be the first to benefit.

Identifying where funds are directed to is key to differentiating yourself in the sector’s new era that is revolutionizing the way we do business and generate revenue, while improving the quality of life of users.

The true enemy of profitability and inclusion is financial invisibility. This is overcome by liberalizing data strategically.


[1] Statista, 2022.

[2] Cardozo, P. (May 9, 2022). 5 tipos de Datos Alternativos para aumentar la Inclusión Financiera en Latinoamérica. E-Banking News.

[3] World Bank, 2022.

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