Category Archives: Finance

Analyst Angle: Mobile financial services in Brazil – telcos new hot revenue stream

The drop in revenue growth and margin in traditional telecom services has led Latin American operators to seek opportunities to provide new services and business solutions for verticals. The low value-added level of connectivity offers associated with end-user needs has also been a trigger for telcos, which are willing to monetize new opportunities through fresh business models. In light of that, operators consider mobile financial services as one of the future’s most promising revenue streams, evidenced by the creation of specialized business units for the service within telcos. Indeed, Brazil’s four major telcos – Vivo, Claro, Oi and TIM – have all partnered with banks, and other stakeholders, to provide mobile payment services.

Most mobile payment services focus on the unbanked population because they don’t have other options that permit them to make safe transactions. The targeted group is low-income users – sometimes with an income that changes from month to month – possessing feature phones or low-end smartphones and with a low awareness about new technologies. Thus, most payment services use text messaging or USSD technologies, as it doesn’t need 3G, nor consumes minutes/user data or requires app installation, therefore being simple and easy to use.

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Historic Economic Deal Brokered in "Pacific Alliance Bloc"

pacific-alliance(BE-Online) Hailing the move as a historic step towards regional integration, the countries revealed the deal would eliminate up to 90 percent of merchandise tariffs between them with months, with the remaining ten percent disappearing by the end of the decade.

The countries also agreed to abolish the need for tourist and business visas, allowing their citizens, which have a combined population of 210 million people, to travel more easily between the four countries.

Formed just one ago, the Pacific Alliance has already drawn praise from a plethora of company executives and politicians, many of whom regard its creation as the most exciting business development in the region for years.

If combined, the four countries would have the ninth biggest economy in the world, with around 2.7 percent of global economic output. They account for a third of Latin American gross domestic product (GDP) and half of the region’s trade with the rest of the world.

The Peruvian and Chilean economies were the fastest growing in South America last year, expanding by 6.3 percent and 5.6 percent respectively. The Colombian and Mexican economies grew more slowly but still outstripped the regional average.

Roberto Azevêdo: First Latin American Nominated as Head of WTO

Roberto AzevêdoThe World Trade Organization has nominated the first Latin American to ever head up the group in its 18-year history, giving the nod to 55-year-old Brazilian  member Roberto Azevêdo. Azevêdo will take charge starting on Sept. 1, 2013, and serve a four-year term as Director General. Roberto Azevêdo had previously served as Brazil’s ambassador to the WTO since 2008, and just barely beat out another Latin American, Mexico’s Herminio Blanco. Blanco, who served as Mexico’s Trade Minister previously, was reportedly the 1st choice of both the United States and European Union.

While entering the position as a newcomer, Azevêdo has had plenty of time to get to know the WTO, and wants to help resurrect its image as a driving force in international trade negotiations, rather than just an international policy-keeper. During his first press conference after the nomination last week, Azevêdo said that “The negotiating pillar of the WTO is completely stuck. There is a clear paralysis in the system. We have a trade agenda that we have to broaden and tackle.” His hopes to revamp the global trade group’s structures did not fall on dead ears, and he’s already got the support of many of the organizations key members, as well as politicians, furthering the call for change.

“By nominating Ambassador Azevêdo as a candidate for this high office, Brazil was confident that his experience and commitment could lead the organization towards a more dynamic and fair world economic order,” said Brazilian President Dilma Rousseff in a statement released to the press. “Still under the effects of the global crisis that began in 2008, it will be up to the WTO in the coming years to give a new, balanced and vigorous impetus to world trade, which is fundamental for the global economy to enter a new period of growth and social justice.’’

The selection of Azevêdo as WTO head speaks volumes of what many consider to be a global shift in economic order; one that stands to benefit Latin America, as well as many other parts of the developing world. “His selection is pretty significant both for Latin America and also for the emerging nations as well as the least developed nations on the globe,’’ said Felipe Berer, a trade attorney with Akerman Senterfitt in Miami. “It symbolizes the new economic order.”

In the past, organizations like the WTO simply overlooked the needs of less-developed nations, including Azevêdo’s own Brazil. However, these days are over, and with new leadership from the region itself, look to be changing sooner than later. This isn’t to say that the WTO will dramatically alter its focus to Latin America, but rather that it will change its focus to include more emerging economies; something that it simply can’t ignore in the new millenium

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Mobile Banking Predicted to Grow 65% Annually in Latin America

According to a recent report by Deloitte re-released by the Latin American Federation of Banks (Felaban), banking by mobile devices is predicted to grow up to 65% annually over the next two years. They also predict that by 2015, the total mobile banking platform will reach up to 140 million people on the continent. These are huge numbers, and if they’re correct, will help bolt Latin America to the forefront of mobile banking user adaption, and usage.


This isn’t the first study to make such a claim, with many believing that mobile money will have a major impact, transforming Latin America in the coming years. The region still has high numbers of both unbanked, and underbanked people, and access to mobile money devices has the potential to change how people in the region do business, especially in rural areas.  According to Guillermo Moreano, VP of Operations and Technology at the International Bank of Ecuador, this has “a great business potential for Latin American banks,” citing that traditional forms of banking, such as checks and large cash transactions will become a thing of the past.


Last year (2012) the penetration rate of mobile banking in the US was at 24.3%, with the age range of the likely user between 19-23. While this number puts them in the lead for now, it won’t be long until one of Latin America’s big mobile countries surpasses them. Brazil currently has the largest amount of mobile users on the continent at 200 million, followed closely by Mexico and Argentina, with 91 and 52 million respectively, according to Deloitte. With high cellular usage rates, and fast-growing smartphone adaption, converting mobile users into mobile bankers may happen sooner than later.

China Plans $2 Billion Latin American Investment via IADB

China Invests via IADBAccording to a recent report by Reuters, China plans on investing roughly $2 billion to back various projects in Latin America and the Caribbean, both in the public and private sector. As an intermediary for China’s funding, Inter-American Development Bank (IADB) will execute the projects, according to a statement released by the organization this past Saturday.

By all accounts, the Chinese contribution is a substantial one, with the People’s Bank of China planning to co-finance up to $500 million in IADB public sector loans, and as much as $1.5 billion in private sector credit. According to the IADB, this will all become available over the next three to six years, stating that the ultimate goal of the fund will be to “alleviate poverty and boost competitiveness.”

On their side of the deal, China has already invested tens of billions of dollars into countries such as Mexico and Argentina over the last ten years, as well as investing into a number other projects in the region. Their primary goal has been to acquire strategic assets or companies in valuable regional sectors like as minerals, energy companies, and even food products. This new injection of capital comes as great news for IADB, which looks to use it as a stepping-stone to help bridge the poverty gap, as well as stimulate an already growing regional economy.

This past March, the IADB along with China’s export-import bank announced a joint $1 billion dollar investment fund for the region to be used for public and private sector investments, demonstrating a clear desire to connect with various prominent institutions all across the continent. Using March’s investment as a blueprint, both parties are confident that this latest round of investment will not only be fruitful for them, but also help build an economic foundation for the region that will pay dividends for many years to come.

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Crisis Economics: Why Spain Needs Latin America

Why Spain Needs Latin America in 2013

Gone are the days of a new currency, and prosperous Euro-laden excitement. Gone are the days of heavy spending, and domestic growth potential. For Spain, the harsh lessons of economic misappropriation and stifling debt are a tough pill to swallow, but an all-too-common one these days for the Western European nation. With national debt and unemployment staggering the Spanish market, the country’s top companies have had to look elsewhere to build their profits and maintain steady growth. That “elsewhere”, for the most part, has been in Latin America.

With emerging markets growing at a steady pace in many countries in the region, Spanish companies have had success in selling their products and services, as well as expanding and growing their businesses in Latin America. All the while in Spain, struggling to stay afloat. While this type of Spanish success in the Americas isn’t necessarily a new thing, it holds a new kind of relevance considering the economic situation back home. The two industries that we see to be making the most out of these emerging Latin American markets appear to be Telecom and Banking.

Which Spanish Companies are Succeeding?

Companies like Telefonica S.A., Grupo Santander, and BBVA have all made significant impacts to their businesses by expanding in Latin American markets. By taking advantage of a common language, and having sewn their business roots early on, these companies have solidified a stronghold in many local markets. For example, Telefonica’s Latin American mobile brand, Movistar, which operates in 14 countries in the region, continues to grow, even as its Spanish counterpart shrinks. Companies such as Grupo Santander and BBVA have likewise made an impression through expansion in the region, operating in 5 (Santander) and 6 (BBVA) countries respectively, with current plans for further expansion in the near future.

How This Affects the Spanish Economy

While the issue of the Spanish debt crisis is far too complex to break down here, it’s safe to say that Spain’s biggest companies, from top to bottom, are feeling the pressure. This is why maintaining, and even expanding a strong market in Latin America is tantamount to staying alive financially as a whole. Latin Americans have more purchasing power than ever before, and are also investing in an unprecedented way. That means big business for companies like Telefonica, Santander, and BBVA. While this doesn’t exactly trickle down to the average Spanish worker, it does keep these businesses’ heads above water for the time being. Though it may be bittersweet, that’s still good news for the Spanish economy overall.

To get the best, most concise information available on Latin American businesses, and inside contacts with the biggest companies, contact us today. We connect you with the top decision makers in a variety of industries, including all three companies listed in this article. Check out our site for more info, and take a test run to see exactly what Latin Target has to offer.

TIM and BMG Partnership for Mobile Banking in Brazil

Brazilian based mobile operator TIM Brasil and bank BMG have partnered to launch a mobile service for customers using BMG bank and credit cards. The SIM card will support access to banking services such as credit applications and balance inquiries and provide bonuses for using mobile services.

The service will work with any kind of mobile phone, not just smartphones. The service will be offered for customers of the TIM prepaid plans Infinity Pre and Cost Control. The goal is to distribute 20,000 cards during the first quarter.

The Rise in Mobile Banking

According to a recent report by Juniper Research, over a billion mobile phone users will have made use of their mobile devices for banking purposes by the end of 2017, compared to just over 590 million this year. Whilst the forecast of 1 billion users by 2017 represents over 15% of the mobile subscriber base, it should be acknowledged that around half of all mobile subscribers remain unbanked, with limited access to traditional financial services.