Fintechs turn their attention to Brazil’s entrepreneurs

Becoming a business owner has its trials, which Brazilians have found out that the hard way, becoming entrepreneurs amid the worst economic crisis in the country’s history. Apart from finding clients and dealing with Brazil’s notorious bureaucracy, they also realized that doing their finances would not be easy. And this is precisely where fintechs have spotted an opportunity.

For many of those entrepreneurs, the journey starts with MEI, a simpler tax system for individual entrepreneurs that earn up to BRL 81,000 per year. By adopting it, small business owners are given a corporate tax ID and may operate as a company. Though they are not required to have a separate bank account for their business, they usually need access to tools such as bank-issued invoices as the business grows.

It is at this point that they face a hurdle: Brazil’s banking system. Designed as they are, company bank accounts are focused on larger companies. They often offer complex—and expensive—tools that are not necessarily useful for small entrepreneurs, charging higher tariffs as they go.