Mintos sees opportunities in Mexico’s alternative lending market
Mintos has reported that €40.7m (£35.8m) was invested in Mexican debt opportunities on its platform over 2022 and the first quarter of this year, as it heralds the country’s alternative lending market.
The European lending marketplace connects investors with opportunities from loan originators from across the globe, now in the form of regulated notes.
“As more individuals and businesses seek alternative funding sources, the alternative lending market in Mexico is poised to become an integral part of the country’s economic development,” Mintos said.
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Short-term loans are the most popular alternative lending product in Mexico, Mintos said, as individuals working for federal agencies or government can qualify for payroll loans to cover their living costs.
Additionally, Mintos lists investment opportunities from Mexican originators including business loans, group loans, health-care loans and car loans on its marketplace.
For example, it currently has €337,293-worth of notes from Mexican business lender Capem available for investment on its marketplace, offering investor returns of 11 per cent.
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It is also offering €736,782-worth of notes from payroll finance provider Dinerito, with target returns of 9.8 per cent.
Mintos noted that Mexico faces “a significant challenge of financial exclusion” due to a high prevalence of cash usage, given its large informal economy. As a result, many people are underbanked, with limited or no access to financial services.
Only 37 per cent of Mexicans over 15 years old have a bank account, while 39 per cent of all transaction values in Mexico are in cash.
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“Mexico is very different from the European markets,” Mintos said in a blog post on its website. “With problems such as financial exclusion, entering the Mexican lending space often comes with its challenges for foreign lending companies.
“With this in mind, Mexico’s alternative lending market is expected to play a crucial role in fostering financial inclusion and driving economic growth, as it continues to navigate the complexities of the global economy and address domestic challenges.
“As many foreign companies have adapted well, and we see an ever-increasing demand for funding also from local lenders, we expect to onboard even more Mexican lending companies to Mintos in the future.”