Goldman Sachs sets its sights on supporting fintech challengers in Latin America (GS)


South America fintech funding

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Goldman Sachs has set its sights on supporting fintech challengers to Latin America’s biggest banks, reports Bloomberg. The bank’s special situations group, which invests in and lends to midsized firms, is looking to invest in fintechs across the region, Gaurav Seth, a partner at Goldman who leads the bank’s business in the Americas, told the outlet.

With over 1,100 fintech firms vying for a share of the region’s burgeoning population, Goldman is aiming to identify the most promising ventures and provide them with the necessary financing or equity to fuel their business. “Latin America is a significant focus for us and a significant area of future growth,” Seth said.

Here’s what it means: Latin America’s huge unbanked population makes it fertile ground for fintech — an opportunity Goldman’s not alone in spotting.

Almost half of Latin America’s population is unbanked— meaning they lack access to basic banking services.This limited penetration of formal banking services offers a vast opportunity for the region’s fintechs: They can leverage technology to extend services to these previously out-of-reach consumers, and at lower costs than their established peers, which have long relied on their extensive brick-and-mortar networks. And there’s ample room for growth: Bank loans represented 62% of Brazil’s GDP in 2018, and even less in Mexico at 35%, per World Bank data. That contrasts significantly with the 186% these loans represented in the US during the same period.
The significant opportunity for fintechs in the region has resulted in substantial investment in these players. For instance, Goldman’s already invested in Nubank, the Brazilian startup founded in 2013, which is …read more

Source:: Business Insider

      

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