Digital Vs Embedded Lending: Two Major Financing Trends In Latin-America To Look Out For

News Americas, NEW YORK, NY, Sept. 19, 2022: As per an OECD report, small businesses represent 99% of the businesses in Latin-American countries and create 67% of the employment. Most businesses are familial-run informal units that lack access to smooth banking and payment processing platforms.

Small and micro businesses manufacture products that have demand in the US and other countries that are recognizing the uniqueness of the region’s products. But the impending problem to SME growth in Latin-American countries is the lack of access to credit to finance working capital and line of credit to facilitate exports and imports. Without improving lending options the SME growth will suffer beginners shocks and reel under the economic pressures of a business.

However, innovative financing options to support the growth of the small business are trending and offer glimmers of hope to small business owners. Here are two financing trends that are promising to change the landscape of SME financing in the Latin-America:

1. Digital Lending

Banks and lending institutions that used to shy away earlier from lending to small businesses are now rolling up their sleeves and supporting the growth of this sector. The hurdles that were faced in the workflow management for lending are now supported by automated loan origination solution platforms that have eased the process. Small business owners can access credit through multi-channel platforms in less than 24 hours of submitting the application

2. Embedded financing

Banks and fintech companies in Latin America are collaborating with other organizations that embed the operations of lending based on the export and import scale of SMEs. For instance, lenders are providing tech-enabled solutions in association with large logistics providers to finance exports.

With technology drivers in place, improvised lending solutions are breaking barriers to SME business growth in Latin-American countries.