Digital lenders have disrupted the loan market in the last few years. They utilise cutting-edge AI and data analytics technology to make instantaneous credit decisions. However, some of these companies face difficulties due to high-interest rates and defaulting customers.
An article in the Brazilian newspaper Valor Econômico analyses the situation. Ricardo Josua, Co-Founder and CEO at Pismo, is one of the experts interviewed about this topic.
He explains that the rise in interest rates has made access to capital more difficult. This relative funding scarcity challenges fintech companies that aren’t well-capitalised and thus depend on capital markets for funding.
Valor Econômico mentions that Brazilian fintechs received investments of US$ 1.6 billion from January to July this year. Almost one-third of this amount was invested in credit fintechs, which continue to lead investments.
Despite being smaller than the 2021 figures, these numbers are not alarming, points out Gustavo Gierun, CEO at Distrito, an innovation platform for startups – also interviewed by the newspaper.
Gierun says the amount invested so far in 2022 is already equal to the total for 2020. According to him, last year was atypical, with excess funding, but 2022 has firm numbers.
Ricardo concludes: “The flow of investment to this sector will continue to come, but it will be more judicious.”
The article is available in Portuguese for subscribers on the Valor Econômico website.