SEBASTÁN J. OLIVERA: MONTEVIDEO FINTECH FORUM FOUNDER AND WEFINTECH CO-FOUNDER, THE IBEROAMERICAN WOMEN NETWORK
According to the World Economic Outlook’s June Update, Latin America and the Caribbean’s economy is estimated to shrink by 9.4 percent in 2020, with a mild recovery of 3.7 percent projected by 2021. The effects of this unprecedented crisis and its uncertain
recovery will be worse for countries suffering from high degrees of exclusion, social and political instability, low quality and penetration rates of financial education, as well as a lack of adequate infrastructure. A huge debt remains unpaid and we have not been able to create a verifiable, refined and consistent information system for making better financial decisions. This is a direct result of the deficiencies, especially in infrastructure areas, and has particular impact on identity validation and access to risk adjusted financial products (especially for the excluded and for SMEs). This vulnerability, unfortunately, will result in an increase in the levels of exclusion and availability of credit, at levels of which it is impossible to quantify the volume under current conditions. On the other side, the high birth rates, existence of a young population eager to adopt technology solutions, and the availability of entrepreneurial talent with global networks, offer the possibility to solve the lack of access to fair, efficient and useful financial solutions and products for the vast majority of the population. But, only 42% of adults in the region declare they have access to financial services, in many cases of poor quality. It is precisely the lack of this consolidated information system and the new reality imposed by Covid-19 that generates the need for the adoption of digital developments to adjust the risk equations in financial products through the use of alternative scoring systems complementary to traditional methods. But this is only half of the equation, as the
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