Goldman Lends MercadoLibre $233 Million for Credit Growth in Brazil, Mexico

MercadoPago, as the financial-tech business is known, will use $106 million to boost its credit portfolio aimed at individuals and smaller businesses in Brazil, while $127 million is earmarked for Mexico

The MercadoLibre Inc. and MercadoPago application are displayed in the App Store on an Apple Inc. iPhone in an arranged photograph taken in Buenos Aires, Argentina, on Monday, June 10, 2019. MercadoLibre dominates Latin American e-commerce with an almost 25% share and 40 million unique monthly visitors.
By Vinícius Andrade
July 11, 2022 | 08:20 PM

Bloomberg — Goldman Sachs Group Inc. (GS) has agreed to loan $233 million to Latin American e-commerce giant MercadoLibre Inc.’s (MELI) fintech arm as the firm plans on expanding its credit offering in two key markets.

MercadoPago, as the financial-tech business is known, will use $106 million to boost its credit portfolio aimed at individuals and smaller businesses in Brazil, while $127 million is earmarked for Mexico, according to a statement Monday. Last November, Citigroup Inc. loaned the firm $375 million.

The Buenos Aires-based company started offering credit services in 2016 and saw its credit portfolio grow to over $2.4 billion in the first quarter, up from about $1.7 billion by the end of last year.

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Lending Push | Bradesco sees five-fold jump in MercadoLibre's credit portfolio by 2026dfd

Lending is “a high margin business” that will double its share in MercadoLibre’s total revenue to about 22% in 2024, up from about 11% in 2021, Bradesco BBI analysts led by Richard Cathcart wrote in a report in May.

Shares of MercadoLibre are down 67% since peaking at the beginning of 2021, joining a global correction in technology names amid higher interest rates. Concern over an increasingly competitive environment in Brazil and challenging comparables after the pandemic-driven boom have also weighed on investor appetite.