What MercadoLibre’s fundraising says about fintech in Latin America

Goldman Sachs announced a $233M loan to Latin American e-commerce giant MercadoLibre. Similarly, Citigroup lent $375M to them last year.

Why should we care?
This is much more than a straightforward debt fundraising round for a burgeoning e-commerce giant. Rather, MercadoLibre may be a gateway for more a digital Latin-American economy—and Goldman and Citi want in on the action by generating demand for fintech products and services. When consumers turn to e-commerce, they also come into contact with payments gateways, loans, and other services. As more customers do so, the more demand there is for fintechs to take advantage of, and the more complex a fintech landscape can become. Goldman’s loan in particular is part of a larger Latin-American one-two punch: It lent $160M to Mexican lending startup Konfio earlier this year. Goldman may encourage companies it’s lent to to develop a financial ecosystem with e-commerce as its hook. We should pay attention to how other US-based financial institutions interact with potential movers and shakers in Latin America’s digital economy. Though the region isn’t immune to inflation woes or other geopolitical turmoil, it may become a more promising prospect for investment if US economic conditions continue to worsen.