TL;DR: Latin America was a global leader in 2018 with 35% of women founders in the industry. COVID-19 has since impacted the region, both challenging it and turning more users into digital services than ever before. More inclusion for women in fintech can lead to profitable returns for this expanding industry. Measures include more mentorship, funding, and empowering women to rise to C-leadership positions.

According to Crunchbase, “Latin America was the region with the highest venture funding invested in women-led companies” back in 2019. The report states “women [were] stepping up as fintech leaders, with five times as many female-founded fintechs as the global average.” 

Latin America’s fintech industry was booming back then. Women were “an integral part of the region’s success.” At that time, and also according to Crunchbase, “more than 35 percent of Latin American fintech startups [had] female founders.” 

Yet, COVID-19 came around shortly after that.

We’re going over the current stance for women in fintech in Latin America in this article. Fintech companies seeking a more inclusive pool of customers and internal stakeholders can find information of value herein. 

Equality for women in fintech in LatAm

Back in 2018, the Inter-American Development Bank shed light on the state of fintech in Latin America. The report included the region being about 28% above the world average in terms of fintechs with a female founder. Mexico was a leader with 31% in the category. The mark was only followed by Colombia’s 14% and Brazil’s 12% in this same regard. Since then, the recent health crisis put these stats in apparent jeopardy. 

The World Bank stated the implications without a doubt. For them, “In Latin America and the Caribbean, a region already plagued by the shadow pandemic of violence against women and girls, [COVID-19] is threatening to erase decades of progress toward gender equality.”

However, fast forward to 2021 and the Wilson Center’s (WC) dialogue on Uruguay’s Technology Sector and the Future of Fintech in Latin America paints a different picture. According to this non-partisan policy forum, “During the pandemic, over 40 million Latin Americans gained access to banking services and millions more adopted fintech tools.” The leap managed to provide “rural and low-income individuals the possibility of personal and business loans, access to e-commerce, and expanded markets for small- and medium-sized businesses.” 

In general, the WC’s data cites the region as being “home to more than 1,000 fintech enterprises, the majority in Brazil, Mexico and Colombia.” Just out of fintech companies in Brazil, Nubank is second in top Initial Public Offerings (IPOs) for Quarter 4 of 2021. The valuation for that round marked $41.5 billion. 

If there’s one assertion to make about LatAm’s fintech scene right now, it’s that its contrasts are indicative of a transforming region. 

Long-standing traditions need evolving

Crunchbase’s data sounded promising for women in fintech prior to the pandemic. Yet, the truth is it also included long-standing, heart-wrenching statistics on traditional female-related stances at a global scale. Among them, how common it is for “women [to] earn and save less and have less job security worldwide”. In this same global context, the same news easily acknowledged that “Women in leadership positions regularly have to deal with being patronized, doubted, and ignored.” This is a live sentiment for many Latin American women in a myriad of contexts. 

Speaking of Latin America particularly, the area “remains one of the regions with the most gender inequality,” Crunchbase reports. It took a full 25 years before “women’s participation in the workforce [increased] to just over 60 percent.” 

The contrast is well-marked. Yet, recorded data also highlights profitable returns in women-led businesses. Especially as Crunchbase also states that “companies with women founders generate 2.5x more revenue for every dollar invested than male-led companies. They also have higher stock prices and a 35 percent higher return on investment.” The options could be limitless. And quite competitive at a global scale. 

Latin America is a broad territory

In assessing fintech in the region, we must depart on a broad diversity and long list of countries that comprise what we call Latin America. 

Mexico, for instance, is part of four countries Boston Consulting Group (BCG) reports as having “managed to buck the global norm; more women than men launched startups in these countries in 2016.” Mexico was also the first country in the region to pass what’s called The Fintech Law. It seeks regulation for fintech, as well as fair competition between fintech, banking, and finance companies.

Uruguay, on the other hand, is home of a fintech unicorn. It’s also currently considered the new Silicon Valley of South America. According to BCG’s report above, however, and in terms of gender equality, “the gender gap is widening” in that country, as well. Further analysis would need to go more in-depth as to why the gender gap is widening in a country that’s “a regional leader in nurturing technology start-ups.” It’s also housing at least 63 fintech companies.

Women need to be banked

Looking at this month’s facts on Statista, “Along with Brazil and Mexico, Colombia is among the top three Latin American countries when it comes to financial technology companies.” The amount of fintechs in that nation make up at least “13 percent of all fintechs in the region.” Fintech is peaking in Colombia with more deals in investment than those in Chile and Argentina is what reports say. And yet, a central detail about fintech innovation in LatAm is how little banked people are in the region. 

On this point, Hackers/Founders’ CEO, Jonathan Nelson, paused to analyze in the WC dialogue how, “being such a huge market, [LatAm] is still only 40 or 50% banked.” Nelson’s company is the largest group of tech founders globally. For him, “That means about half of the population of Latin America of 400 million people need bank accounts.” The implications for fintech are obvious. 

Yet, look back on Colombia in that sense. Reports say “The gap gets even wider when one takes into consideration the share of women in Colombia using such services.” Women also need to be considered more as consumers in this disruption.

What are the proposed solutions?

When speaking of Latin America and the Caribbean, UNICEF gives a broad solution towards gender equality. According to this organization, “In order to achieve significant changes in gender equality, it is necessary to increase awareness and promote a change in behavior, as well as to promote public policies that transform power dynamics and unequal gender relations.” It’s also important to couple public measures with private sector internal and external policies that boost female inclusion. In this sense, pressing external parties towards more female inclusion has also been a practical step in reshaping industries. 

The inclusion of more women entrepreneurs around the world is a highly relevant aspect in this discussion. Reaching more female inclusivity wouldn’t just tackle gender inequality in diverse lines of business. It would also considerably boost our global economy. Crunchbase news based on BCG’s research said it clearly; “Including women entrepreneurs equally could boost the global economy by $5 trillion.” 

The business value of having a woman on a board seat was clear for Goldman Sachs back in 2020, for instance. This company’s CEO announced no longer doing any IPOs for companies with all-male boards. For them, IPOs with a woman on the board performed “significantly better than the performance of IPOs when there hasn’t been a woman on the board.”

What’s missing is also a bit of sustainability to any increasing gender parity. As BCG dictates, “in Latin America, women’s businesses lag in that sustainability measure by 11 percentage points.” Topping this with education is certainly a valuable aspect of integral measures towards more gender equality. Mentors, schooling…from kindergarteners to fintech corporations, women could use empowerment. We need data, tools, community, and resources that make them speak up and take action in their fields.

Fintech disruption is here to stay

The Inter-American Development Bank ended the prologue of their study reinforcing fintech disruption. For them, this revolution is here to stay. They stressed the notion while pointing out the wide range of options the industry has to offer. In that hopeful address, the need for further work for equative consolidation in the industry came through loudly, however.  

Education programs are urgent, along with public and private policies. We need to include mentorship for women in the sector to rise to the top. Opening up more means of funding for female-owned companies goes hand-in-hand with valuable thought on services that include women. That is the case in the banking sector in this region, especially. 

On a more tech-oriented front, we need to seize everything the latest tech has to offer. It’s time to put the best of fintech innovation at the forefront of our regional and global table. The latest tech trends can certainly boost a more equitable industry. 

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