Contxto – Coronavirus and the subsequent economic slowdown are putting the Mexican economy in a bind. But it’s not all doom and gloom. For fintechs, there are initiatives to help others cope as well as hidden opportunities.
And in a recent press release, executives from fintechs Fondeadora, Swap, and Propeler shared their thoughts.
Mexico’s Fondeadora faces facts
Mexican challenger bank, Fondeadora, is all about making the money management experience as hassle-free as possible. Which is also why it also understands that its users are stressed with all that’s going on right now. As a result, in late April, the startup announced the launch of its Buena Onda program—literally meaning “Good Vibes.”
This initiative wants to offer free services and subscriptions to its loyal users. And it covers an array of areas that we all need to be watchful of—mind, body, and personal finances (of course).
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Rightly so, everyone should find ways to cope with these times of uncertainty. But it won’t last forever.
“This economic crisis is temporary, and we’ll make it through,” said Rodrigo Sánchez, Fondeadora’s Chief Operating Officer in a release.
It won’t be immediate but rather in a couple of years. Sectors won’t disappear entirely. But without a doubt, there are niches that are being favored, among which is the fintech industry that can bounce back precisely because it doesn’t need to do anything in-person.
Rodrigo Sánchez, Fondeadora COO
Fintech finesse means not relying on physical branches to keep operating.
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Swap and the users swapping to new solutions
For Bruno Ramos, payment platform Swap’s CEO, fintechs were prepared for what was to come:
They were ready for a world where everything was managed remotely or through a cellphone. Digital transfers have increased, as well as the adoption of transfer systems that had previously been unused, like sending money via WhatsApp to another person.
Bruno Ramos, Swap CEO
That, of course, means new users are coming through fintechs’ digital doors. Not to mention making electronic transfers easier for everyone.
Moreover, it’s a safer option when reducing person-to-person contact.
Among its recent relief-providing activities, this fintech partnered with telemedicine platform, Doctoranytime. Through their collaboration, Swap’s users can access one free medical consultation through the healthtech’s system and address any coronavirus-related topics.
Props to Propeler, Arkangeles, and loaning fintechs
If banks were tight-fisted before when it came to dishing out loans for small businesses, they’ll be more so in upcoming months.
“For credit-granting financial institutions, the biggest challenge will be to carry out an in-depth analysis of which businesses are truly solvent, how to manage an expired portfolio, and so on,” noted Propeler’s CEO, Daniel Mizrahi.
In light of that reality, fintechs that offer loans are also assuming a larger risk, but playing a critical role in keeping businesses alive.
Similarly, many venture capital (VC) investors have battened down the hatches and shifted their focus towards helping their current portfolio companies. Therefore, many startups face limited opportunities when it comes to accessing capital.
Consequently, crowdfunding platforms like Propeler and Arkangeles are valuable allies for startups to connect with the investors that know them best: the users themselves.
- Related article: What happens when you invest in Contxto?
Through these platforms, a person can sign up and start investing in startups they know and love with as little as US$500. Fondeadora, for example, had previously closed an investment through Propeler. Meanwhile, Contxto is currently raising a round through Arkangeles.
Undoubtedly, fintechs play a critical role. Thus it’s unpleasant to imagine how countries, businesses, and individuals would cope through Covid-19 and the inbound recession without them.
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-ML
