Spain is a country where old meets new, tradition dances “with innovation, and the economy basks in the sun of digital transformation and the fintech boom,” the team at Mintos notes.
The report from Mintos points out that Spain, with its mix of beautiful beaches, ancient history, and lively culture, happens to also be “the fourth-largest economy in the Eurozone and the 13th globally, boasting a strong domestic market and a thriving export sector.”
As stated in a blog post by Mintos, the Spanish economy has “shown resilience in the face of the 2008 global financial crisis and the more recent COVID-19 pandemic.” Although it experienced significant contractions, Spain emerged “from both crises with a stronger, more innovative, and digitally adept economy.”
The Mintos report also mentioned that Spain’s GDP “contracted by -11% in 2020 due to the pandemic, but a strong rebound of 5.5% in 2021-2022 points to its resilient nature.”
The nation’s economy boasts diverse sectors, “with services leading the charge, accounting for approximately 67% of GDP, followed by industry (20%) and agriculture (2.6%).”
Spain is also known “for its large automotive industry and is the second-largest car manufacturer in Europe, producing over 2 million vehicles in 2022.”
The fashion retail industry is also “a notable contributor to Spain’s economy. Inditex, the parent company of Zara, recorded sales of €32.6 billion in 2022, and Mango, another iconic Spanish brand, reported a turnover of approximately €2.6 billion in the same year.”
As explained in the report from Mintos, Spain, traditionally anchored “by its powerful banking sector in the Eurozone, is now gaining momentum as a linchpin in the European fintech domain.”
Ranking 7th in Europe and 21st worldwide, the nation’s financial sector “has wholeheartedly embraced the transformative potential of fintech.”
This prominence has “not only elevated Spain’s reputation but also ignited an investment fervor.” Capturing a significant 46% slice of global fintech investment, “the nation’s appeal as an investment hub is undeniable.” The bustling cities of Madrid, Barcelona, and Valencia emerge “as fintech hotspots, hosting over 80% of these startups.”
Furthermore, digital financial adoption in Spain “has outpaced many of its European neighbors.” By the close of 2022, “approximately 69% of Spaniards between the ages of 15-79 had engaged with e-banking and e-commerce services.” This high adoption rate isn’t limited to banking but extends “across the fintech spectrum, from digital wallets and payments to insurance technology.”
This rapid adoption is “not merely a reflection of technological convenience but a shift in consumer behavior and trust.” Mintos further noted that the Spanish populace is “not only becoming more tech-savvy, but is also increasingly placing trust in digital platforms for their financial needs.”
Mintos pointed out that “given these dynamics, Spain’s fintech landscape is not just growing but evolving, positioning itself as a critical player in the European fintech arena.” The coming years are poised to “witness further integration, innovation, and perhaps even dominance of Spanish fintech within Europe.”
A new era: Alternative lending in Spain
The data pertaining to Spain’s alternative lending market “paints an enlightening picture of the evolving financial landscape in the country.” Mintos added that the total volume of alternative lending is valued well over €600 million. This steady, annual progression is indicative of a larger shift in Spain’s financial behavior, “signifying a greater trust and reliance on non-traditional lending avenues.”
In the first half of 2023, ID Finance Spain, “an emerging fintech in alternative lending, posted revenue of €59 million.” Their growth metrics are “indicative of the broader shift in Spain’s financial landscape, as more Spaniards lean towards non-traditional lending avenues.”
Factors fueling this trend “include the perceivably rigid structures of traditional banks and the allure of fintech solutions.” Platforms like ID Finance Spain’s MoneyMan and the award-winning financial wellness app, Plazo, are case points. Their rapid approvals and tailored solutions are “appealing to an increasingly tech-savvy populace.”
Forecasts suggest “that by 2024, the average funding per loan in the crowdlending sector (business loans) will soar to €70 000.” This surge might “be attributed to Spain’s blossoming entrepreneurial spirit.”
Tapping into Spain’s alternative lending boom
The report added:
“In a world where traditional banking systems often fall short in meeting the varied needs of consumers, alternative lending presents a new frontier. Spain, with its evolving economy and adaptive consumers, has quickly recognized the potential of this non-traditional financial ecosystem. ID Finance Spain is a testament to the thriving alternative lending market in the country.”
Founded in 2012, ID Finance Spain is “headquartered in Barcelona and has continued to show resilience and growth in this expanding sector.”
The company reported “a net portfolio increase of 8% to €51 million and originated €121.1 million in consumer loans in the first half of 2023 alone.” On average, they process over 70,000 applications per month, “highlighting the strong demand for alternative lending solutions in Spain.”
Investing in Notes for ID Finance Spain “provides an avenue to contribute to and benefit from Spain’s growing alternative lending landscape.”
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