RIO DE JANEIRO, BRAZIL – On Monday, November 9th, Mercado Libre, the largest e-commerce and financial services technology group in Latin America, was granted authorization by the Central Bank (BC) to operate as a financial institution, according to a statement released by the company. The decision had already been published in the Federal Gazette on October 15th, but the monetary authority only confirmed it on Monday.
The Central Bank’s endorsement makes room for Mercado Libre to consolidate its operations in the credit sector. The company has had Mercado Crédito since 2017, with loans for clients with an account in the Mercado Pago, a fintech for payments in Mercado Libre.
The announcement comes one month and a half after Mercado Libre announced that it had received a contribution of R$400 million from Goldman Sachs, intended to expand its credit service.
“The financial institution license will allow the company to reinforce its focus on expanding credit operations within its ecosystem. Since its inception in 2017, the group has already granted over R$4 billion (US$740 million) in credit in Brazil, in a total of over ten million transactions. These operations have mainly reached consumers and entrepreneurs with no access to credit in the traditional financial system”, explains Tulio Oliveira, vice-president of Mercado Pago, which operates as a payment institution.
According to Tulio Oliveira, with the authorization, Mercado Pago will have greater autonomy to develop financial and credit products and services.
The financial institution license will also allow Mercado Pago to access different funding sources, which can complement the company’s funding strategy.
“Having a more complete list of financing instruments will benefit the entire fintech area in a structural way and will provide greater solidity and resilience to the business,” says Pedro de Paula, director of Mercado Crédito in Brazil.
Source: Exame