How technology can help Brazilians who are invisible to the financial market

Study released by data analysis company Serasa Experian identified 35.3 million Brazilians with no financial records. This means that 21.7% of the country's adult population has no consumer accounts, financing, loans or credit card bills registered on their CPF, nor are they even on the Positive Register. Also known as "Thin Files" or literally "people with no credit information", they are generally individuals who do not use credit regularly and therefore have no recent activity on their record, as well as young people who have not yet started their financial life and have no charges.

Serasa Experian's work points out that guaranteeing people and entrepreneurs access to the financial system can bring benefits to companies which, by adapting their products to the needs of this public, can have a new source of revenue. For consumers and entrepreneurs, it expands the possibility of obtaining credit on the market, turning the engine of the economy and creating a healthier society from an economic point of view.

Financial institutions such as Banco do Nordeste (BNB) are developing projects to serve consumers who have been left out of the market in the regions where they operate. To do this, they decided to invest in their own brands to take part in the so-called "vending machine war" underway in the national market, with the support of the payment methods company EntrePay, an acquiring company owned by the Entre Group, led by businessman Antonio Carlos Freixo Junior, or Mineiro.

Through this partnership, EntrePay provides the infrastructure and payment machines with the BNB brand so that the financial institution can transform CrediAmigo, the largest microcredit program in Latin America, into a broad microfinance program that already reaches more than 2 million people.

"The partnership with BNB has a very significant social impact," says Anderson Santana, EntrePay's commercial director for products and operations. "We are enabling access to modern banking services and payment solutions for people who were previously unbanked or semi-banked."

One of EntrePay's main objectives is to make inroads into markets that don't attract as much interest from other major competitors in the means of payment sector. This is why it is focusing its efforts on cities in the North and Northeast. "It's no wonder that, while the acquiring market is currently growing by 12% to 13%, EntrePay's expansion is 66%," Santana boasts.

EntrePay's strategy is in line with those of fintechs and digital banks which, supported by regulatory incentives from the Central Bank in recent years, are developing technologies to offer, for example, the opening of a current account in minutes, much simpler than traditional banks, without the need to go to a branch or pay maintenance fees - whether for individuals or companies. 

The pent-up demand for better and cheaper services and products - for both individuals and companies - was so great that it prompted an avalanche of new startups. According to the consultancy Distrito, between 2014 and 2018, 503 fintechs were born that were willing to change this scenario and participate in it, triggering a digital transformation whose positive effect was to bring consumers to the market who were on the margins of it.

The numerical consequence of this transformation was measured by the Central Bank. A survey by the monetary authority showed that between June 2018 and December 2023, the number of active individual users doubled in the financial system, from 77.2 million to 152 million. Much of this demand was met with technologies developed by these new competitors, such as EntrePay.

Among legal entities - including individual micro-entrepreneurs (MEI) - there was an increase from 3.4 million to 11.6 million clients, which translates into a growth rate of 244.5% over the period.

EntrePay is a company specializing in financial services with customized payment solutions. It offers innovative technologies and services for various sectors, enabling small, medium and large businesses to receive payments from their customers via white label card machines or e-commerce.

At the heart of the Entre Group's ecosystem of payment solutions, aggregated services and financial solutions, EntrePay operates in the acquiring market and offers efficient and flexible solutions to accelerate business through strategic partnerships.

_{Photo by Nita Anggraeni Goenawan on Unsplash}