San Diego-based index development firm EQM Indexes LLC has launched a new index, the EQM Emerging Markets FinTech Index (EMFINQ), providing exposure to public companies in emerging markets and frontier markets deriving significant revenue from financial technology (FinTech) solutions and applications.
According to the World Bank, 1.6 billion people are “unbanked” globally, the firm writes. Emerging and frontier markets have provided fertile ground for FinTech solutions, disrupting traditional financial service and banking models. Innovations in digital forms of payment, banking, lending, and financial services, have leveraged FinTech to address the needs of previously unbanked and underserved populations transitioning to consumer-driven economies.
As Jane Edmondson, EQM Indexes Co-Founder and CEO, explains, “Prior to the pandemic, digital infrastructure in emerging and frontier markets had lagged behind those of developed nations. But thanks to pandemic-driven consumer needs and buying habits, digital disruption has accelerated and is fueling rapid innovation in FinTech.”
Supported by favorable demographics, with a young, tech-savvy population armed with smartphones but without bank accounts, emerging and frontier market economies are poised and ready for innovative FinTech applications solutions in:
Lending & Credit;
Investment & Trading;
and Digital Assets (digital wallets, mining, exchanges platforms, etc.).
The Index will provide investors with exposure to companies not easily accessible to U.S. investors, including public companies domiciled in India, Africa, and Latin America, that are leading the charge in FinTech innovation, deriving more than 50 per cent of their revenues from FinTech solutions and/or applications.
The Index has been licensed to be tracked by an exchange traded fund (ETF) expected to be approved in early February.