Crowdfunding consolidated, despite pending FinTech Law

According to the World Bank, crowdfunding is expected to be worth over USD$ 90 billion by 2020
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet – Photo: Nicolas Asfouri/AP
10/02/2018
09:25
Antonio Hernández
Mexico City
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Crowdfunding companies operating in Mexico performed well during 2017, even though the FinTech Law is pending approval.

"Crowdfunding has grown exponentially because people are noticing that there are more convenient and cheaper investment alternatives and credit options out there," assured Gerardo Obregón, CEO of Prestadero, the leading peer-to-peer (P2P) lending platform in Mexico.

Currently, there are 238 FinTech startups in the country distributed in 11 different segments, including crowdfunding with 55 startups alone, positioning Mexico as the single largest FinTech market in Latin America, clearly surpassing other leading markets in the region such as Brazil where 230 startups have been developed.

Last year, Prestadero's loan portfolio grew 41%, amounting to MXN$217 million and investors that fund the loans obtained yields of about 13.5%.

"Such yields are the result of a disruptive financing model called crowdfunding," emphasized Obregón.

It should be noted that crowdfunding is expected to be worth over USD$ 90 billion by 2020, according to the World Bank.

Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. It is a form of alternative finance which reduces costs and facilitates management opposed to traditional financing.

Financial technology (FinTech) is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services through the use of smartphones for mobile banking and investing services which seek to make financial services more accessible to the general public.

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