Talent, Loans Required for Fintech and MSMEsBy Peter Appleby | Thu, 11/19/2020 - 17:45
Mexico’s fintech sector needs more talent with the expertise to address growing industry needs, an industry insider told OpenFinance 2020 this week. But loans are required too, not in the form of investments but to meet the overdemand that fintechs are seeing from MSMEs desperate for financial aid. Meanwhile, Mexico’s third-richest person took to Twitter to back Bitcoin in a welcome piece of news for the cryptocurrency industry.
All this and more in the Week in Finance.
Mexico’s booming fintech industry has continuously made headlines over the last two years. But according to Mario Hernández Rivera, Director General of the recent OpenFinance 2020 meetup, it is missing key talent.
El Economista reports that Hernández Rivera said incentives were needed to develop talent to supply an industry that is on the up, with the skills to continue innovating and pushing the still-novel industry to the next level. “Mexico has all the potential to become a country within the Top 5 in terms of development of the Fintech ecosystem,” he said. “You cannot have a leading industry without the resource that feeds its growth.”
The director added that with the rapid development of digitalization in Mexico, some 50 percent of the country’s GDP will be created via digital activities in the years to come.
Ricardo Salinas Pliego, who according to Bloomberg is Mexico’s third-richest person, has thrown his hat into the cryptocurrency ring by announcing on Twitter that 10 percent of his liquid capital is invested in Bitcoin.
“Many people ask me if I have bitcoins. YES. I have 10 percent of my liquid portfolio invested in it,” Salinas Pliego wrote on Twitter. The billionaire first invested in Bitcoin four years ago, said Bloomberg.
Cryptocurrencies have attracted even more interest in the wake of COVID-19 as experts suggest fiscal stimulus packages, in which the government must print more money, could reduce the value of traditional currencies. Over the past year, Bitcoin’s value has doubled.
MSMEs generate 72 percent of the employment opportunities in Mexico’s formal sector. Yet, they have received very little government help to survive the COVID-19 downturn.
MSMEs cannot meet the requirements of traditional banks to access loans or credits, so MSMEs have sought help from Fintechs, reports El Heraldo de Mexico. So many companies have requested credits or loans that there has been an overdemand that the small fintech ecosystem has failed to meet.
“At the end of September, the demand for credit from companies exceeded our ability. By the end of the year, we expect demand to exceed our capabilities by four to one,” Director of Fundary, a fintech company supplying credit to MSMEs, Marcelo de Fuentes, said.
Konfio, another fintech company that offers credit to MSMEs, has just received a loan of US$63.6 million from the Interamerican Development Bank to help SMSEs struggling during the crisis, reports LexLatin.