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Consumer Finance in Latin America: Challenges and opportunities in an emerging region

By: VRL
Published: February 2010

Consumer Finance in Latin America

The Latin American consumer finance market has expanded rapidly over the past decade. Although product penetration remains low, the infrastructure for increased consumer credit is developing and the long term prospects are enormous.

This report analyses the prospects and opportunities in the consumer finance market in Latin America.

 

 

To purchase this report, or to request a report summary or list of case studies, call Jeannie on +44 (0) 207 563 5640 or email info@vrlfinancialnews.com

 

Over the past five years, the consumer finance sector in Latin America has enjoyed exceptionally high growth rates and returns. Buoyant economic conditions and rising incomes have fuelled a growing demand for credit among a population eager to enjoy the conveniences and comforts promised by western-style consumerism.

As a result, domestic banks are refocusing their strategies on consumer finance and foreign players are rushing into the market

This report explains:

  • Profiles of key products and players
  • Emerging consumer trends, including the appetite for new technology
  • Successful approaches to banking the region’s significant unbanked population
  • The importance of consumer education strategies
  • Approaches to credit risk management
  • The options for entering the market through acquisition, alliance and partnership

Case studies include; Banamex, Banco Azteca, Banco de Chile, Banco de Credito e Inversion, Banco de Estado, Banco do Brasil, Banco Inbursa, Banco Itau-Unibanco, Banco Santander Chile, Banco Wal-mart, Banorte, Bansefi, BBVA – Bancome, Corpbanca, Falabella, Grupo Financiero HSBC, Grupo Financiero, Santander, Lime, MasterCard, Nexxo Financial, Redecard, Rêv Worldwide, Santander, Tu-Dnro, Visa and Xoom.

To purchase this report, or to request a report summary or list of case studies, call Jeannie on +44 (0) 207 563 5640 or email info@vrlfinancialnews.com

 

Strong economic trends have caused salaries to rise and have led to improved consumer confidence, resulting in a boom in consumer spending. A growing acceptance of credit is also replacing a traditional aversion towards debt, which has been stimulated in turn by greater availability of loans, aggressive marketing, and more favourable rates and terms in an increasingly competitive market.

However, despite the consumer finance market’s exceptional growth rates, penetration of consumer finance products is still low in comparison to many other countries, and significant growth is likely to continue into the foreseeable future. The region is also exposed to a downturn in world commodity prices. While a number of nation’s political course has been relatively stable in recent years, political risk should not be overlooked either. The nascent infrastructure for consumer credit is developing across the region. Legislation is gradually being put in place to regulate consumer lending, and the credit bureaux system and collections industry are gathering momentum.

Latin America represents one of the most rapidly growing regions for consumer finance providers, owing to expanding economies and increased consumer spending power. Over the past four years, the consumer finance sector in the region has enjoyed positive growth rates and returns.

The key finding of the research is that Latin America hosts one of the most rapidly growing regions for consumer finance providers.  Indicators of this include the growth in banking licenses in Mexico and the forecast that Brazil is set to become the world’s third largest card market by the middle of the decade.

The results of this research will certainly encourage new consumer finance providers to pay closer attention to this fast developing market, in particular given the less favourable prospects in many developed nations at present.

Section 1:Regional Overview

Chapter 1 Developing regions: Latin America

Chapter 2 Region review: Latin America
A market being driven by innovations
Partnerships
Remittances
Prepaid cards
Banks
Profiles of innovators

Section 2 Country Surveys

Chapter 3 Mexico
The dynamics of consumer demand for credit
Demographics overview
Economy
Recent Trends
Macro Forecasts
Consumer attitudes
The Consumer Credit Market
Market Structure
Top Consumer Finance Mexican Players
Types of consumer finance
 - Financial cards
 - Mobile banking
 - Personal loans
 - Auto Finance 
 - Money transfers and remittances

Chapter 3 Brazil
The dynamics of consumer demand for credit
Demographics Factors
Economic factors
Consumer Credit Market
Market structure
Consolidations and competition
Top Players
Payments networks and acquirers

Chapter 4 Chile
Determinants of the demand
Demographic factors
Economic factors
Consumer Finance Market
Market Structure
Top Players
Types of Products
 - Financial card
 - Debit Cards
 - Credit Cards
 - Prepaid Cards
 - Auto Loans
 - Mortgage Loans

Appendix 1: Peru
BCP confident of mass market growth

Case studies include; Banamex, Banco Azteca, Banco de Chile, Banco de Credito e Inversion, Banco de Estado, Banco do Brasil, Banco Inbursa, Banco Itau-Unibanco, Banco Santander Chile, Banco Wal-mart, Banorte, Bansefi, BBVA – Bancome, Corpbanca, Falabella, Grupo Financiero HSBC, Grupo Financiero, Santander, Lime, MasterCard, Nexxo Financial, Redecard, Rêv Worldwide, Santander, Tu-Dnro, Visa and Xoom

View full report summary

To order a copy of this report:

- contact us by email

- call Jeannie on +44 (0) 20 7563 5640

VRL publishes around 30 in-depth reports every year. Containing proprietary data, in-depth analysis and considered intelligence, VRL reports review the most pressing issues and trends impacting on the world of finance and cover a broad range of topics. These reports are compiled by associate editors, who are specialists in their field and contain original, previously unpublished content, based on fact and expert opinion. VRL reports provide the analytical intelligence needed to make informed business decisions in a concise and cost-effective manner, and often negate the need to incur costly external consultancy services.

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Retail Banking Products:

Publications:

Retail Banker International
Banking and Payments Asia

Conferences:

Retail Banking and Cards Forum, September 2010, Bahrain (TBC)  
Retail Banking/Payments Innovation, Kuala Lumpur, 11-12 May 2010

Roundtables:

Retail Banking/Payments Asia Roundtable, detailed subject matter TBC, Hosted by Titien Ahmad, VRL Asia-Pacific, and Hugh Fasken, Editor, Retail Banker International, August 2010

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