Retail Investors and Crowdfunding Platforms in Chile: Risks, Opportunities, and Regulatory Challenges (Revista Brasileira de Políticas Públicas)

Summary

• The fintech ecosystem in Latin America and the Caribbean grew by 112% over three years, expanding from 1,166 platforms in 2018 to 2,482 in 2021.p.11
• In Latin America, 85% of alternative finance and crowdfunding platform funding is directed to SMEs, with funding in Chile reaching $804 million in 2020.p.19
• The number of fintech companies in Chile expanded from 65 identified in 2017 to 179 in 2021.p.12
• Latin America accounts for 1% of total global fintech investment, with crowdfunding representing a share of 0.03%.p.14
• European regulations provide non-sophisticated investors with a pre-contractual reflection period of 4 days to revoke an investment order without penalty.p.24

Key insights

1. The credit access gap for small and medium-sized enterprises in Latin America reaches 35% of regional GDP, driving demand for alternative digital financing.p.19
2. The fintech industry across Latin America experienced an average annual growth rate of 34% between 2017 and 2021.p.12
3. Brazil leads the Latin American fintech platform ecosystem with 31% of the total, followed by Mexico at 21%, Colombia at 11%, Argentina at 11%, and Chile at 7%.p.11
4. European Union regulations require platforms to establish explicit business continuity plans to ensure ongoing contract administration if an intermediary ceases operation.p.23
5. Unlike European frameworks that offer 4-day reflection periods and secondary bulletin boards, Chilean regulations lack specific exit mechanisms to mitigate investor illiquidity.p.24
6. Integrating artificial intelligence into crowdfunding platforms improves credit assessment and project selection, but requires algorithmic governance and auditability to protect retail investors.p.25