Fintech: digital credits grew 755% in two and a half years

The digital credits awarded by the fintech In Argentina they experienced significant growth in recent years, reaching almost 5 million people, which means an increase of 755% in two and a half years, according to data released by the sector’s business chamber.

Furthermore, more than 40% of these users obtained their first formal credit through fintech, which indicates growth in the acceptance and inclusion of digital financial services, according to the latest data from the Central Bank (BCRA).

The financial technology sector, known as fintech, continues to grow exponentially in Argentina, revolutionizing the financial landscape and the way of carrying out transactions, especially when requesting loans.

At the moment, almost 5 million people in Argentina they agreed to digital credits through fintech companies, which represents an increase of 755% compared to two and a half years ago, when it only reached 583,000 people.

“The Central Bank’s Non-Financial Credit Providers Report highlights a significant transformation in the sector Argentine credit system driven by fintech. These companies experienced notable growth in users in recent years, which generated a positive impact on the financial inclusion of millions of people without a salary account or credit history,” said the company. Argentine Fintech Chamber that brings together the sector.

This increase in the adoption of fintech services demonstrates how Technology is transforming the way people They interact and manage their finances since these types of companies manage to capture the attention of users, offering solutions that adapt to the needs of an increasingly digitalized population.

Fintech: what type of client accessed the credits

Along these same lines, the BCRA report highlighted that More than 40% of these users obtained their first formal credit through fintech.

“Of that population, and59% did not have a salary account at the time of taking the loan and 41% had never had access to a credit product through the formal system,” the Chamber noted.

In this sense, the fintech group is the sector that provides the most credit to people without a salary account (59%), while it is second among those who do not have debt with financial entities (41%).

Regarding geographical location, the percentage of Argentine adults with a loan from a fintech company is 14%, being higher in provinces far from the main financial centers such as San Luis, Neuquén, Santa Cruz, Misiones, Formosa and Corrientes.

Fintech world: the industry numbers

Regarding the current scenario of the sector, the report revealed that in Argentina there are 53 fintech companies dedicated to providing credit and financial services, of which 17 were also Payment Service Providers (PSP).

These companies can offer loans for a total of $214,000 million until June 2023which represents 16.5% of the total loans granted by non-financial entities.

Also, a cincrease in personal loan rates in the first half of the year, where fintech companies were average among OPNFCs, with 169% TNA.

“The limits to access greater funding and increase the volume of credits and other access restrictions will reflect the difficulties in establishing lower rates in this context,” the report added.

Despite this, more and more people access this type of applications that allow them to offer loans by creating user history through their behaviorwhich allows them to obtain credits according to their needs.

Refering to gender distribution in personal loans offered by the entity, and50% of those who requested a loan identify as women and the remaining 50% as men.

While, the average age of applicants is around 34 years and mostly, they come from CABA and AMBA (40%), followed by Córdoba (9%), Santa Fe (6%) and Mendoza (4%).

Fintech: what are the reasons why credits are requested

Then, among the most frequent reasons for personal loans are to cover unexpected expenses, settle outstanding debts or make small purchases and in addition, many people choose to use these resources for investments, improving their home through remodeling or taking trips.

For their part, at points of sale, many of these loans are used to acquire work tools or motorcycles, while others are used for general consumer purposes, such as purchasing appliances or other products.