Fintechs Out-Lend the Banks
msp@mspee08
+1.2%
since Oct 9
The idea
Small merchants and restaurants across Latin America, Southeast Asia, and Central Asia keep getting turned away by traditional banks, but the apps and payment platforms that see their daily sales are stepping in to lend instead. This basket leans into the digital banks and merchant lenders closest to that shift, balanced with global card networks and payment rails for steadier exposure, plus a cash buffer.
What it owns
- The biggest app-based banks are already taking customers, deposits and loans from traditional banks, giving the take steadier footing. · MercadoLibre, Inc.Mercado Pago lends to sellers and shoppers using sales data that traditional Latin American banks do not have, taking credit business and deposits from established competitors., Nu Holdings Ltd.Nubank pulled a large customer base, deposits and loans away from Brazil's traditional banks through an app and is expanding the same model into Mexico and Colombia., Inter&Co, Inc.It is a Brazilian app bank offering accounts, payments and credit to people and small businesses that traditional big banks do not serve well., PicS N.V. (PicPay)PicPay grew from a Brazilian payments wallet into a challenger bank, converting wallet balances into deposits and loans that come from the market share of traditional banks.30%
- These companies lend to small shops using the sales data they already see in their own platforms, a pattern that repeats across regions. · Sea LimitedSea's Monee arm lends to small Shopee sellers across Southeast Asia using their daily sales data, reaching merchants that traditional banks will not serve., StoneCo Ltd.It runs card machines and banking services for small Brazilian shops and restaurants, so it can lend against the daily sales it watches in real time., Joint Stock Company Kaspi.kzKaspi is the app most Kazakhs use to pay, shop and borrow through, and its merchant side offers both payments and credit to small sellers in one place., PagSeguro Digital Ltd.PagBank started by selling card readers to tiny merchants and converted that into deposits and loans for people that traditional banks ignored.29%
- Visa and Mastercard earn a slice each time cash gets replaced by a card or digital payment, adding steadier returns as cash disappears in emerging markets. · Mastercard IncorporatedIt wins the same way as Visa when shops and shoppers in emerging markets drop cash for cards, and many challenger banks run on its network., Visa Inc.It earns a small cut each time cash gets replaced by a card or tap, and the fintechs in this take issue many of those cards in growing emerging markets.18%
- They move money into and out of emerging markets for cross-border commerce, so they grow as more spending runs through apps instead of banks and cash. · DLocal LimitedIt moves money into and out of emerging markets for global merchants, earning more as spending in these countries shifts from cash and bank branches to apps., Payoneer Global Inc.It pays small sellers and freelancers in emerging markets for cross-border sales and lends to some of them, doing work that traditional banks do poorly., Remitly Global, Inc.It sends money home to families in Latin America and Asia through an app instead of a bank wire or cash counter, displacing traditional money transfer channels.14%
- Cash9%