One of the positive impacts that Free market generated during the Covid-19 pandemic in Latin America, is the financial inclusion.
According to a study presented this Thursday -which was carried out by Euromonitor International in five countries in the region: Argentina, Brazil, Chile, Colombia and Mexico-, 40% of small and medium-sized companies (SMEs) received your first credit offer through Payment Market, and more than 60%, was used to invest in working capital.
“Until December 2020, 1.7 million credits were granted to 550,000 sellers for an average amount of $ 325,” the study indicates.
In the same way, precise, the payment link of Payment Market grew more than 100% in the last two years, and allowed many companies to continue selling during the quarantine. “Digital collection media allowed more women to undertake in the context of Covid-19.”
Also, reveals the document, for three out of 10 users in the region, Payment Market it was the first means of payment outside of cash; As of March 2021, 1.5 million Mercado Crédito users previously had no credit or card history, and 3.7 million agreed to the possibility of buying in installments.
“In most countries in the region, purchases in cash decreased by 22% on average. In countries such as Argentina, Mexico and Brazil, digital payments are increasingly considered a more secure modality than cash,” he says. The report.
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Half of the population of LA does not have financial services
Despite these advances in the region, for the director and founder of Free market, Marcos Galperin, there is still a huge space to continue growing in electronic commerce and the democratization of financial services.
“That everyone in Latin America can save and pay digitally; who can access credit, regardless of whether they have a bank account or not. We are on the way, but there is still a long way to go, “he said.
In videoconference in which the study was presented “Impacts that matter. How the Mercado Libre ecosystem generates value in Latin America”, He stressed that today in the region about half of the population does not have access to financial services.
In this sense, he considered that through the digitization of economies and financial services, through the application of modern tools such as Artificial Intelligence, the ability to generate a credit history can be given to anyone for the first time , regardless of their income, geographic location, whether they have a formal job or not, and in a certain way also allow millions of SMEs to access credit through the sales they make on digital platforms.
Cash usage is going down
Marcos Galperin highlighted that, thanks to the different alternatives that have emerged, the use of cash is falling sharply in Latin America.
“About three or four years ago, when we launched the QR code, many thought we were crazy, and we said at the time that we were going to make cash disappear in Latin America. The truth is that that was our goal, and we are seeing enormous progress in that regard, with the use of digital payments growing dramatically in our region, the use of cash decreasing, ”he said.
He mentioned that some of the benefits of paying for digital channels are that a credit history is generated; help to formalize the economy; to generate tax revenue, plus it is safer.
Cryptocurrencies are here to stay
The founder and director of Free market estimated, on the other hand, that cryptocurrencies They are here to stay, but to become a means of payment, there are still many challenges that must be overcome, so today competing against options such as QR will be difficult.
“Today we see that with payments through QR codes, we can already have immediate, efficient, extremely fast, and inclusive payments,” he emphasized.
Impacts in Mexico
The study highlights that some impacts of the Free Market in Mexico They are: that more than 288,000 families have this platform as their main source of income, and more than 38,000 joined in 2020; and also 8 out of 10 SMEs managed to make sales outside their city for the first time.
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In financial matters, 51% of SMEs in the country received their first loan through Payment Market, and 30% considered that the company offers better conditions to obtain financing, in addition to that the sales of the entrepreneurs increased by 31% after the integration of Mercado Pago in their businesses.
Mexico is one of the most relevant markets for Free market, since it is the second country that registers the highest growth in the sector of e-commerce with 25 percent.
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