(Bloomberg) — Goldman Sachs Group Inc. has agreed to loan $233 million to Latin American e-commerce giant MercadoLibre Inc.’s 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.
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.
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