Lack of black leadership in Brazilian startups reduces opportunities

When Sergio All, a black Brazilian entrepreneur in the advertising business, tried to take out a loan to upgrade his firm’s equipment many years ago, he was turned down by his bank, despite having been a client for years. The bank failed to provide an adequate reason as to why he was rejected. Indeed, the ‘no’ received by Mr. All is a recurring phenomenon across Brazil. According to a survey published in 2019, developed by Pretahub in partnership with JPMorgan and Plano CDE, one-third of black entrepreneurs in Brazil reported being turned down for loans for no reason. 

However, that ‘no’ was the spark that eventually led to the creation of Conta Black, a Brazilian fintech focused on addressing financial exclusion for the segments of society historically denied access to the banking system.

Founded in 2017, Conta Black now has around 10,000 clients, targeting individuals from Brazil’s C, D, and E socio-economic classes, corresponding to lower middle-class and below. In order to open the digital account, clients are not submitted to a credit score analysis, which other banks — both traditional institutions and fintechs — generally require. 

The Global Findex Research, conducted by the World...