BUENOS AIRES/MEXICO CITY, Sept 30 (Reuters) - When

Wagner Dias and his wife Mariana needed a loan to grow their

children's clothes business, the Brazilian entrepreneurs turned

to Argentina's MercadoLibre Inc ( MELI ), the online platform

they use to sell their products.

MercadoLibre ( MELI ), which is making a push into an increasingly

crowded regional fintech and credit market, already had the data

it needed to green-light the loan. The Amazon.com ( AMZN ) of Latin

America has used innovations like that to cement its status as

the region's most valuable firm with a market capitalization

exceeding $100 billion.

"Because they had access to all my app history as a seller

and buyer, there was no red tape. The money was deposited

instantly," said Dias, who borrowed in total some $30,000 to

build the couple's business in Sao Paulo.

"I can ask for credit with one click," said Dias, explaining

that the first $11,000 tranche of the loan had boosted sales by

40% within six months.

MercadoLibre ( MELI ), which has overtaken Brazilian state energy

giant Petrobras this year as Latin America's most valuable

company, is finding new ways to serve Dias and others in its

online "ecosystem" to lock in shoppers and sellers. Its new

offerings, ranging from credit to movies, have helped fuel its

rapid expansion.

The company is growing digital advertising revenues toward

$1 billion this year with tie-ups for content with firms like

Disney ( DIS ). It has added distribution centers to support sellers,

and is using artificial intelligence to boost its loan business

and streamline administrative costs.

"We believe that we have a tremendous competitive advantage

in the fact that we have an ecosystem," the firm's CEO Marcos

Galperin told Reuters in an interview in Buenos Aires, adding

that the financing and commerce business spurred each other.

"When you have more financing, e-commerce grows. And vice

versa."

MercadoLibre ( MELI ) is the dominant e-commerce player in Latin

America, weathering aggressive pushes by Amazon ( AMZN ) and

others. But on fintech it still lags behind pure digital finance

rivals such as Brazil's Nubank or Argentina's Uala. It wants to

replicate the crossover success of Chinese online marketplace

Alibaba ( BABA ), whose Alipay wallet is among the top players in the

world's second largest economy.

Galperin said growth of the fintech business was strong

considering the tough regional competition. Fintech revenues

increased nearly a third over the last year, second quarter data

showed, though it declined slightly as a percentage of overall

sales. Its credit unit grew at a faster rate, near 50%.

Galperin said MercadoLibre ( MELI ) wanted to be a major option for

Latin Americans as they rapidly shift away from cash as the

traditional form of payment and savings.

"Basically the idea is to give each user a private banker of

their own," he said. He downplayed concerns some analysts have

expressed about non-performing loans, saying the plethora of

data the firm had on its users reduced that risk.

"We use artificial intelligence, we use machine learning, we

have a lot of information between MercadoLibre ( MELI ) and Mercado Pago

that we can use... We have so much information on these people

that we feel very comfortable providing them loans."

BUYING NEW SHOES, WHAT ABOUT A LOAN?

Investors are bullish on the company's outlook. The stock is

currently at $2,100, and in September, Morgan Stanley hiked its

target price on the shares to $2,500 from $2,175. Also in

September, JPMorgan ( JPM ) signed a $250 million financing deal

to expand MercadoLibre's ( MELI ) fintech business in Mexico.

Growing use of smartphones in Latin America is opening

up online saving and spending options to millions in a region

where around a quarter of the population has little or no access

to bank accounts or relies solely on cash.

"We're really just scratching the surface of all that we can

do," said Galperin, explaining that e-commerce and digital

payment use was far higher in Asia, Europe and North America. He

was targeting tripling active users to 300 million.

But MercadoLibre ( MELI ) faces strong competition from regional

fintech rivals like Nubank or Uala, which secured a banking

license last year in Mexico and is also using AI to aid credit

scoring systems, a company spokesperson said.

"It's still smaller than large competitors, but it has been

calling attention in the space," said Maria Clara Infantozzi at

Itau bank in Sao Paulo.

Argentine confectionary business owner Silvina Riveros was

growing tired of traditional banks but opted to get a loan from

Uala to buy appliances "mainly due to the cheaper commissions

for the service and the speed of crediting money into your

account," she said.

"I've given up on high street banks, there's too much

paperwork and bureaucracy."

MercadoLibre's ( MELI ) potential ace card, however, remains its mix

of commerce and finance. The firm is boosting areas like food,

apparel, beauty and electronics, and has opened more warehousing

and distribution centers to speed up delivery.

It is also experimenting with an electric delivery fleet and

drones to get goods to hard-to-reach consumers in isolated areas

of Brazil. While drone technology remained niche, Galperin said

"those geographies happen quite a bit in Latin America."

Meanwhile, millions of customers like 24-year-old Irlanda

Zermeno from Mexico City, are taking out smaller loans from the

platform to help them buy more products at check out.

Zermeno told Reuters she was shopping on the MercadoLibre ( MELI )

app for a pair of new shoes, when a message popped up offering

her credit to make the purchase in installments.

"I didn't look for (a credit line), they suddenly just asked

me: do you want one?" said Zermeno, who works in public

relations. "Ever since then I use it frequently. If you pay back

on time, the credit amount you can take goes up."