A person using the latest Fintech Business in Guatemala.

Opportunities for Fintech Business in Guatemala

Opportunities for Fintech business in Guatemala are growing as the country has seen a significant increase in Fintech start-ups and operational companies.

Guatemala is one of the most popular countries in Central America to start your business in. In Latin America, the biggest Fintech countries Mexico with 238 start-ups, Brazil with 219, Colombia with 124, Chile with 75, Argentina with 60, Perú with 47 and Ecuador with 31. Guatemala still offers many niches for Fintech start-ups. Gain insight into the opportunities for the Fintech business in Guatemala.

Find out about opportunities for fintech business in Guatemala, an up and coming economy in Central America.

A breakdown of Fintech in Guatemala

The function of these financial companies is to offer more dynamic tools: fast money transfers, loans, purchase and sale of properties, investments, and financial advice.

Fintech, also known as “Financial Technology”, refers to all companies that offer banking or financial products and services adapted to modern technology to provide more efficient services to all users. The greatest strength of fintech companies is that they offer a business model focused on existing and new clients.

The function of these financial companies is to offer more dynamic tools: fast money transfers, loans, purchase and sale of properties, investments, and financial advice. This guarantees a simpler process for the user and a reduction in costs for the company through virtual processes. Some emerging fintech segments in Guatemala include:

  • Payment and remittance
  • Business financial management
  • Leasing
  • Personal finance management
  • Crowdfunding
  • Asset management.

Fintech business activity and regulations in Guatemala

Guatemala’s fintech industry has experienced rapid growth in recent years. According to the Fintech Latin America Report, Guatemala had just 4 start-ups operating in the Fintech Business in 2018. Around the end of 2019, this increased to 25 start-ups operating in the Fintech industry. Consequently, by the end of 2019, the association of Fintech in Guatemala was incorporated for those fintech companies that were operating locally to provide clear representation. The rapid growth of the fintech market during 2019 solidified the position that Fintech companies hold in the financial services market.

Fintech businesses operating in Guatemala do not have any specific regulations set out in law. However, if you are looking to expand your Fintech business, you must comply with rules and regulations generally applicable to any business enterprise, such as personal data protection, consumer protection, taxation, as well as civil and commercial law.

How does COVID-19 affect Fintech in Guatemala?

The Fintech sector needs to adapt quickly to the challanges COVID-19 causes.

The COVID-19 pandemic has affected companies’ and countries’ ability to do business. Daily commercial activities, such as banking, have become difficult due to governments’ responses against COVID-19.

Fintech offers a solution to this issue. According to Statista, Guatemala currently has more than 7 million users in the fintech market and the value of the digital transactions of its beneficiaries exceeds US$3.2 billion. This situation forces governments, businesses and consumers to approach digital channels as a natural solution.

“Many fintech models depend directly on economic activity, but worldwide, the revolution in the sector comes from the 2008 crisis”, says Jorge López de la Peña, member of the Fintech Guatemala Association. “Accordingly, fintech companies are very agile to adapt to new challenges,”

The ‘new normal’ of home working and consumption require new solutions for businesses and customers to manage financial transactions and processes remotely. Fintech innovation offers security to those transactions. Many industries and models have suffered a negative impact, such as cross-border payments or travel and tourism.

The following Fintech sectors can support in these times of COVID-19:

  • Financing for individuals and companies.
  • Money transfers
  • Mobile collection systems
  • Personal finance systems through applications
  • Crowdfunding
  • Crowdlending
  • Platforms for commercial transactions
  • Collective payments
  • Fintech dedicated to the movement of remittances
  • Mini-operations (microcredits and microloans).

A note on Insurtech in Guatemala

Hire a lawyer when doing business in the Fintech sector in Guatemala.
Guatemala regulates its insurance activities strictly. Contact legal services to comply with legal laws.

If you are looking to expand your business in the Insurtech industry in Guatemala, you should know that insurance activities in Guatemala are regulated by the Insurance Activity Act (Congressional Decree 25-2010) and its complementary rules.

Guatemala regulates its insurance activities strictly. According to the applicable laws and regulations, an insurance license is required to undertake insurance activities. There is a wide variety of types of insurance in the country; the most common insurance services available are life insurance, health insurance, civil responsibility, all-risk insurance, and most recently, mandatory public transportation insurance. Each type of insurance has its specific set of regulations, treatment, and coverage.

Expand your Fintech business to Guatemala with expert support

With the increasing growth of modern technology and the COVID-19 crisis, the Fintech business has become very important for the global economy.

We’re a market leader in supporting international businesses start their Fintech business and other ventures in Guatemala. Our team of local experts in Guatemala offers in-depth advice and guidance on local compliance and formation processes for new businesses.

Read more about Fintech in other Latin American countries. Contact us today for more information.

Learn about our team and expert authors.

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Legal Team Guatemala

Legal Team Guatemala

Legal Team Guatemala is the Biz Latin Hub leading experts on doing business in Guatemala The Team writes on the news, doing business, law, and changing regulations. The team are experts in corporate law, Administrative law, Employment law, Immigration law and legal advisory services. Read more about them here. You can contact Legal Team Guatemala via our "contact us page".

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