If there is a country in Latin America that is doing things well in the development of emerging companies (
start-ups,
by its name in English) it is Brazil, says the successful Argentine internet entrepreneur Hernán Kazah.
“I would say that they are a world example for the way in which they have generated a base of equality so that fintechs [financial services technology companies] can offer better products and that way Brazilians have access to better financial services and cheaper credits” .
Kazah, who in 1999 co-founded the electronic commerce platform MercadoLibre, is together with Nicolás Szekasy the founder of Kaszek Ventures, which has become the largest venture capital fund in Latin America with a total of 2,000 million dollars in money raised .
His praise for Brazil refers to the Pix electronic payment system, developed by the Central Bank of Brazil to reduce the cost of transfers and make them immediate.
"In less than two years it has become the number one means of payment, it is used from buying a car to paying for a coffee in a bar," Kazah explained to Negocios during a telephone interview.
Question.
Fintechs
have grown across the continent, not just in Brazil
.
To what do you attribute it?
Answer
.
Because the cost of distributing financial products is lower and that technology helps a lot in a fundamental part of the products, which is how to measure risk.
In addition to traditional factors, such as a company's balance sheet, or knowing your salary and who pays you, you can analyze behavior in networks and many other things that are connected.
The ability provided by technology to define the risk profile of each user greatly helps the development of financial services platforms.
Q.
Could it also have to do with the fact that a significant part of the population was not banked?
A.
Even in Brazil, where they are more developed, the penetration of financial services is low compared to global standards.
The combination of this market in which there is a low level of penetration with the advantages that technology incorporates has led to the appearance of many opportunities in
fintech.
Q.
Can fintechs help financial inclusion?
R.
Through technology, a region like Latin America, which still has many gaps in its development, can progress.
I'm not saying that technology is going to completely or magically solve these gaps, but it is going to reduce them.
And one of them is precisely financial inclusion.
Being excluded from the system represents a very great additional difficulty.
Just imagine a small business that can't process card payments or can't access minimal credit to purchase inventory.
And the same with users: how can I hire an online course if I have no way to make a payment because I only handle cash?
Q.
In the US, technology companies such as Microsoft, Apple, Amazon, Alphabet and Meta have also become the largest in the country by market value.
Can this happen in Latin America?
Or is it a privilege reserved for technology companies that are world leaders?
R.
The same is going to happen in Latin America.
In terms of market value, the main companies in the region have so far been banks and energy companies.
I think we are going to see companies like MercadoLibre there, which in fact became the most valuable in Latin America for a while last year, although the price correction that has occurred in the technological world has changed the ranking a bit.
There is also the digital bank Nubank [in which Kaszek has interests], which was born in Brazil and already has operations in Mexico and Colombia.
I believe that these two are going to be among the five most valuable companies in the region in the next 5 or 10 years, and surely there will be others, regardless of whether they have a Latin American or more global focus.
Q.
It is often said that large technology companies generate more benefits than employment contracts.
What do you think?
R.
The impact on employment can't just stop at Alphabet's payroll, for example, but its ramifications on the economy.
Beyond the employees, Google has an Android application market for which there are infinite companies developing products, and all these companies have many employees, in addition to the entrepreneurs who have their small businesses set up on top of Google or who sell online thanks to Google.
The impact of technology on employment is enormous.
We know it because of the number of vendors who use MercadoLibre and recognize that it generates the main income for their family, there are around 100,000 people.
It's like what happens with roads.
The first impact on employment would seem to be only the people who are building the road,
Subscribe to continue reading
Read without limits
Keep reading
I'm already a subscriber