Financial inclusion advances 40% in Argentina, Brazil and Mexico, but is still due, according to a Mercado Pago study | DF SUD

Although the adoption of technologies such as payment, savings or investment methods accelerated exponentially during the pandemic, financial inclusion still maintains some of the rate shown then, despite the fact that by the second quarter of 2022 it did not exceed 40% of the population in Argentina, Brazil and Mexico.

The data comes from the Inclusion Monitor developed by Mercado Pago together with Americas Market Intelligence to analyze the progress of the tool among its users in the three countries between the first quarter of 2020 and the second of this year.

The index is made up of four big areas: access, use of tools, digitization of cash and quality and financial health.

account access

According to the study of the payment subsidiary of the e-commerce platform Mercado Libre, access to company accounts “showed unprecedented growth after the coronavirus crisis, Mexico being the economy with the highest post-Covid growth rate, while Brazil has the highest relative proportion of selling accounts and Argentina stands out for its growth in the last quarter”.

A) Yes, the increase in access to accounts in the North American nation (which are mostly for personal use) exceeds 320%, if the record for the first three months of 2020 is taken as a reference, when the health crisis was just beginning, and is compared with the second quarter of 2022. In quarterly terms, growth was 5%.
For his part, Argentina presented an increase of almost 250% in the post-pandemic period, while quarterly the advance was 10%. In the case of Brazil, the growth was 169% for the more than two years of the health situation, while compared to the beginning of 2022 the figure was 4%.

“Digital financial inclusion accelerated five years during the pandemic”, explained Ignacio Carballo, head of alternative finance, digital banking and fintech at the consultancy Americas Market Intelligence.
“When weighing internal and external data, progress in financial inclusion is still very important because it maintains a high and sustained pace,” he added.

Mercado Libre enters the business of physical and virtual prepaid cards

credits and uses

Another point that the Argentine company analyzed was access to credit, which it considered had also “shot up after the pandemic.” The number of users who accessed loans grew in all economies and eight out of 10 loans granted are for less than four months.
In this way, per user, average loans reached 3.7 in the second quarter of 2022, a figure that increased seven times compared to the beginning of 2020.
As for Mercado Pago accounts, their use increased “considerably”, so those with more than three movements grew in the three economies, exceeding 75% between April and June of this year. This was driven by the increase in people who have deposited money into their accounts, going from 16% to 41% in the case of Mexico; from 25% to 77% in the case of Argentina and from 38% to 65% in Brazil.
These figures show that Argentina continues to be the market in which Mercado Libre and its businesses obtain the greatest penetration year after year. In fact, of 55% and 72% of credit card users in Argentina and Brazil, respectively, one in three uses Mercado Pago as the only way to cancel their accounts.

Thus, 70% of users already claim to use less cash and, according to the study, say that their financial reality improved. At the same time, 45% of consumers revealed that they had accessed a loan or credit card for the first time. “In Mexico eight out of 10 businesses claim to have received their first credit with Mercado Pago, while in Brazil there are five out of 10,” the company detailed in the presentation.
This goes hand in hand with more than 80% of Argentine users who claim to feel safe when using Mercado Pago, but are faced with the fact that seven out of 10 users declared that they had not received financial education.

The paths of Mercado Libre and Nubank in the world of cryptocurrencies

Investments

The report also revealed that access to investment sustained high growth rates (306%) from the first quarter of 2020 (7.3 million) to the second period of 2022 (22.4 million).

“They had exponential growth. Beyond that today Mercado Pago offers investments in cryptocurrencies in Brazil and launched fixed terms. The product that makes it have this exponential growth is the link with mutual investment funds in the money market. This is the great differential and the great driver of the growth of Mercado Pago investments, because in these three countries there is no bank that gives returns on the money deposited in the savings account”, argued the economist.

Financial inclusion advances 40% in Argentina, Brazil and Mexico, but is still due, according to a Mercado Pago study | DF SUD