Southeast Asia (SEA) and Latin America (LATAM), home to over one billion people, are emerging as global economic powerhouses — driven by investments in infrastructure, middle-class expansion, and digital transformation, according to a report by Valor Capital Group and Credit Saison.
“Latin America and Southeast Asia are no longer just emerging markets; they are defining the future of digital finance, trade, and economic collaboration,” said Bruno Batavia, Director of Emerging Tech at Valor Capital.
According to him, unlocking their full potential will require regulatory modernization, regional partnerships, and financial innovation to be central to the agenda.
Hence, the report said that that despite their readiness for growth, both regions continue to face financial inefficiencies and regulatory barriers.
‘[T]hey are defining the future of digital finance, trade, and economic collaboration … unlocking their full potential will require regulatory modernization, regional partnerships, and financial innovation …’
FIRST OF ITS KIND
The first-of-its-kind comparative study calls for increased investments in digital finance, cross-border collaboration, and blockchain to unlock their full potential, emphasizing how these regions are reshaping global trade and finance.
While economic expansion is evident, countries in LATAM and SEA remain financially fragmented — limiting access to credit and hindering commercial integration.
Small and medium-sized enterprises (SMEs) are also the backbone of these economies, but 87 percent of their financing needs in Latin America remain unmet, resulting in a $1.4 trillion financing gap. In Southeast Asia, 51 percent of micro, small, and medium enterprises (MSMEs) face difficulties accessing financial services, creating a $272 billion deficit.
Meanwhile, traditional banking systems, still reliant on outdated credit assessment models and manual processes, are unable to keep up with growing demand, stifling the growth of millions of businesses.
“This report serves as a critical blueprint for stakeholders seeking to harness the immense potential these regions offer. Credit Saison has been in Brazil since 2023, and has been present in Southeast Asia for over ten years, with the unique ability to deploy investments via private credit and venture capital to support the growth of fintechs and founders in both debt and equity,” said Qin En Looi, Partner at Saison Capital, the corporate venture capital arm of Credit Saison.
FINTECH: DRIVING CHANGE
In response to these challenges, innovation in the financial technology or fintech sector and the rise of venture capital investments are transforming the financial landscape.
SEA created 151 new venture capital funds in 2021, while LATAM peaked at 69 funds in 2019, indicating strong investor confidence.
The total number of funding rounds nearly doubled in Southeast Asia, while in Latin America, the total volume of investments grew 8.7 times, underscoring the rapid evolution of the financial ecosystem.
This influx of capital has led to significant acquisitions in the fintech sector, expanding the region’s appeal to global investors. Notable examples include Visa’s $1 billion acquisition of Brazilian fintech Pismo, TikTok’s $1.5 billion investment in Indonesia’s Tokopedia, and PropertyGuru’s $1.1 billion acquisition in Southeast Asia.
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