Mercado Pago, Mercado Libre's banking arm, has secured a $466 million investment to boost its growth. This funding, provided by Citi through its divisions, aims to enhance the lending capabilities of Mercado Pago's financial branch, Mercado Crédito, in Brazil and Mexico.
The investment is split between the two countries, with Brazil receiving $237 million from Banco Citibank SA and Mexico obtaining the equivalent of $229 million from Citibanamex.
The strategic move is set to broaden financial services to consumers, independent professionals, and small businesses, strengthening economic activity in these regions.
Citi's Latin America General Director, Julio Figueroa, emphasized the bank's dedication to fostering growth and offering tailored financial solutions to enhance Mercado Libre's lending efficiency.
Mercado Crédito has seen its credit portfolio expand by 22.6% annually, with a valuation of $3.4 billion by the third quarter of 2023. Notably, 20% of this portfolio is attributed to sellers both within Mercado Libre’s platform and in the broader regional market.
The new two-year agreement with Citi builds on a previous successful $375 million deal in 2021.
Senior Vice President of Credits at Mercado Pago, Andrés Anavi, interprets the investment as a strong signal of confidence, propelling financial inclusivity throughout Latin America. He affirms that this will empower numerous individuals and small to medium-sized enterprises (SMEs) in Mexico and Brazil to pursue growth, realize their ambitions, and contribute positively to society.
The joint statement from both firms also clarifies that Mercado Crédito operates under different legal names in Argentina, Brazil, and Mexico, with its Mexican operations being regulated as a Financial Technology Institution (FTI).
