The Opportunity of Automated Lending in Latin America

Obtaining a loan in Latin America remains a challenging task for many people. Although 58% of Latin Americans have a credit card, only one-third have access to other forms of credit, such as loans. This reveals a significant opportunity for financial institutions to expand their services. However, traditional loan origination and management systems (LOMS) face a number of inefficiencies and scalability challenges that hinder this expansion.

One of the main obstacles is the lack of adequate access to banking services. Currently, 7 out of 10 people in Latin America have limited or insufficient access to these services, creating a clear paradox. Although the region shows high economic potential, many of its residents remain excluded or underserved by traditional financial systems.

The problems with traditional loan systems

The process of applying for a loan remains lengthy and complicated. Often, forms must be completed on paper, resulting in high operational costs and an extended approval process. Applicants, such as small business owners, must gather a large number of documents, visit branches, and wait weeks for a response.

Mariano Viademonte, Chief Growth Officer at Mobifin, explains that on average, a small rural business can take between 25 and 35 days to obtain a loan, while in countries like the United States, this process can be completed in as little as three hours. Viademonte points out that this inefficient system affects not only applicants but also financial institutions, which must allocate significant resources to manage paperwork and physical documents.

The situation is clear: the traditional loan system needs a reinvention. This is where automation comes into play.

The Solution: Automated Lending in Latin America

Javier Morales, VP of Marketing & Business Development at Mobifin, notes that automated lending has the potential to radically transform the financial landscape in Latin America. These systems allow users to complete loan applications quickly and efficiently through online portals or mobile apps, without the need to visit a branch.

Moreover, automation can accelerate document verification in real time, allowing loans to be approved in a matter of hours rather than weeks. This approach not only saves time for applicants but also reduces operational costs for financial institutions, which no longer need to handle large volumes of physical paperwork.

Another crucial factor is the incorporation of artificial intelligence (AI) in the validation process. AI can instantly verify applicants’ credit information by connecting with credit bureaus and verification lists, such as fraud prevention. This way, loans can be automatically adjusted to the specific characteristics of the applicant, further streamlining the process.

A Call to Reinvent Lending

Automated lending represents a unique opportunity to bridge the gap between financial inclusion and access to credit in Latin America. If financial institutions adopt these systems, they will not only be able to expand their services but also improve their customers’ experience.

To learn more about how automated lending can revolutionize the financial industry, don’t miss Mobifin’s webinar: “Reinventing Lending.” There, Javier Morales and Mariano Viademonte will share their insights and strategies for transforming loan origination and management.