- Fintechs may assist in granting credit to small businesses;
- Brazil has 504 fintechs, 85 of which are operating on credit.
Groups representing the Brazilian fintechs have submitted to the country’s Central Bank a program of BRL 5 billion ($940 million) aimed at increasing the flow of credit to micro, small and medium-sized companies, according to Valor Econômico.
The proposal seeks to increase the number of fintechs authorized to adopt measures already launched by the monetary authority to free up more resources and minimize the impact of the coronavirus crisis on small businesses, a group that has suffered the most from the effects of quarantine and social isolation measures and with more difficult to access credit.
At the end of March, the National Monetary Council decided that Brazil’s fintechs would be able to issue credit cards and transfer funds from BNDES, the country’s national development bank. The measures, however, only allow adherence by regulated fintechs, which are licensed to act as payment institutions, which includes digital banks. Data from the consultancy Finnovation show that Brazil has 504 fintechs, 85 of which are operating on credit.
“They were positive measures, but they are concentrated only in those regulated entities. Our demand is to extend these measures to other fintechs as well, ”said Ingrid Barth, executive director of the Brazilian Association of Fintechs (ABFintechs), to Valor.