In Costa Rica, the Fintechs increased by 400%, according to a study conducted between Finnovista and the Inter-American Development Bank (IDB).
The report shows an X-ray of the Fintech sector in Costa Rica, intending to inform about the main challenges faced by Costa Rican entrepreneurs.
Problems to solve in Costa Rica’s Fintech ecosystem
In Costa Rica, there is currently no agency to coordinate entrepreneurship efforts, while angel investors are unaware of what startups need in the early stages, these two being the main problems identified in the report.
Despite these difficulties, the entrepreneurial ecosystem has been strengthened in the Central American country. 55% of the key actors in the ecosystem provide financial support. In the last two years, startups in Fintech have a 0% mortality rate, in addition to a 400% growth in the country’s Fintech.
Key points in Costa Rica’s Fintech ecosystem
Costa Rica has competitive advantages to boost its development in financial technologies, such as the presence of qualified talent thanks to foreign technology companies that operate in the country; the high rate of mobile penetration and manageable size that makes it an ideal site for proof of concept.
Of all Fintech present in Costa Rica, 40% (10) are technology companies that offer services to financial institutions, 32% (8) provide payment solutions, 12% provide tools for the management of corporate finances, 12% are they devote to developing alternative financing platforms, while another 12% created alternative scoring.
The Fintech ecosystem of Costa Rica is at an early stage of development, which is reflected in the number of employees that companies have. 62% have one to ten employees, while only 15% of companies have more than 50 employees.
Fintech regulation in Costa Rica
The study carried out between Finnovista and IDB included an analysis of the Fintech regulation, taking up cases such as Project Innovate in the United Kingdom and the Fintech Law in Mexico, to then focus on Costa Rica. Costa Rica offers regulatory clarity to Fintech thanks to its membership in the Fintech Association of Central America and the Caribbean.
Mario Hernández, CEO of Impesa, believes that “the regulatory framework must protect users so that the market continues to promote companies that innovate and introduce new models. However, you must defend them with creative schemes that give the Fintech field to innovate. You must have an open mind and be pragmatic. “
The report Fintech in Costa Rica: Towards an evolution of financial services by Finnovista and IABD can be downloaded from the Internet.