Latin America and Southeast Asia, home to over one billion people, are emerging as global economic powerhouses — driven by investments in infrastructure, middle-class expansion, and digital transformation. This is according to a report by Valor Capital Group and Credit Saison, which highlights that despite their readiness for growth, both regions continue to face financial inefficiencies and regulatory barriers.
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.
“Latin America and Southeast Asia are no longer just emerging markets; they are defining the future of digital finance, trade, and economic collaboration,” says 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. “The next decade will be crucial in determining whether these regions can overcome their historical financial limitations and emerge as fully integrated players in the global economy.”
Small and medium-sized enterprises (SMEs) are the backbone of these economies, but 87% of their financing needs in Latin America remain unmet, resulting in a $1.4 trillion financing gap. In Southeast Asia, 51% of micro, small, and medium enterprises (MSMEs) face difficulties accessing financial services, creating a $272 billion deficit. Traditional banking systems, still reliant on outdated credit assessment models and manual processes, are unable to keep up with growing demand, stifling the growth of millions of businesses.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. Through our experiences as an operator in global markets with steep Japanese heritage, partnerships and knowledge exchange are critical to navigating and adapting to local nuances and forming successful strategies in the market. For Credit Saison, it’s always about winning together with our partners. We look forward to deepening our engagement in both regions to collaboratively unlock pathways to sustainable growth,” said Qin En Looi, Partner at Saison Capital, the corporate venture capital arm of Credit Saison.
Cross-border payments represent another significant challenge. Remittance fees in both regions average 6.1% — more than double the United Nations’ Sustainable Development Goal (SDG) target of 3%. This translates to an annual cost of $7 billion for consumers, reducing disposable income and limiting financial mobility. Additionally, international payments can take up to five business days to settle, undermining the efficiency of global trade networks.
Venture Capital and Fintechs Driving Change
In response to these challenges, innovation in the fintech sector and the rise of venture capital investments are transforming the financial landscape. Southeast Asia created 151 new venture capital funds in 2021, while Latin America 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. These transactions highlight the increasing volume of investments in financial infrastructure.
“In Brazil, although we lead in fintech innovation, we have one of the world’s most complex currency exchange systems, requiring over 100 transaction codes for financial operations, which creates operational inefficiencies. In Mexico, the lack of local debt funds forces fintech startups to rely on equity financing, which hinders their scalability,” explains Bruno Batavia, Director of Emerging Tech at Valor Capital.
