Pronus, a Colombian investment bank and structurer specializing in the fintech sector, warned about the rGlobal reduction of financing for the sector via loans and capital.
Funding has become more expensive between 30% and 40% and locally up to 20%, according to various surveys.
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Figures from the market intelligence platform CBInsights show that the fintech funding has fallen 46% on average globallywhile in Europe it has decreased by 41%, in the United States the drop is 43%, in the case of new unicorns it has been 58.3%, 45% for investments of US$100 million and up and for banks 77%.
According to Camilo Zea, CEO of Pronus, it is also they have reduced the rounds of capital. At 22.86% for digital loans, 24.6% for payment platforms, 16.56% for insurtech and 26.32% for capital market Tech.
With the pandemic, the financial sector, which for some years had been deepening the development and innovation of digital tools had to speed up the process in view of quarantines and isolations and the new forms of work that had to be implemented. In this way, the crisis changed the banking sector in the world and introduced new products and withered others, “but the process is in full evolution,” says Zea.
Thus, according to the executive, the fintech industry took a strong boost and generated improvements in financial inclusion and in the economic well-being of customers, which is positive for a region like Latin America where there are still marked gaps in this area.
However, with the pandemic, governments around the world took measures to partially supply loss of jobs or drop in income of the most vulnerable populationssays a Pronus report.
Checks for those who became unemployed, aid without conditions and other types of subsidies, policies applied by the different governments, as well as the reduction of interest rates by the central banks were part of the recipe applied to counteract the effects of the semi-paralysis of the economy, summarizes Camilo Zea.
But this was subsequently accompanied by inflationary pressures that are currently developing. But the problems do not stop there, because to these are added the crisis of the containers and the contraction of the supply of raw materials due to the military conflict between Ukraine and Russia.
Additionally, the rates of sovereign bonds have reached the maximum value of the last 14 years, says the CEO of Pronus.
On the other hand, the behavior of the Country Risk indicator for the region in recent years may discourage the execution of investment projects because the rates at which they are lent become more expensive.
According to Pronus, it is important that the financing solution adapts to the needs of the company, so it is necessary to identify the best forms of financing offered by the market in order to find a solution that is 100% compatible with the operation.
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According to Erick Rincón, former president of Colombia Fintech, in the case of the country, financing has become more expensive due to the sharp rise in interest rates and the announcement of the narrow economic contraction of the sources of capital.
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