Tech roundup: Brazil’s fintech race for SME customers

Illustration: Andrii Yalanskyi/Shutterstock

Welcome to our Tech Roundup, where we bring you the biggest stories in technology and innovation in Brazil and Latin America. This week: The new frontier of Brazil’s fintech revolution is about winning business customers, not individuals.

The fintech race for SME customers

In the same week that Cora, a fintech founded in 2020 with a mission to serve entrepreneurs, reached 1 million customers, Nubank passed the mark of 3 million corporate clients in Brazil. Despite being two digital players, their approaches to what the industry sees as the next frontier of the fintech revolution in Brazil are slightly different.

Why it matters. Brazil has just over 21 million small and medium-sized enterprises (SMEs), including 14.5 million one-person businesses. They are the main target of digital banks and lending fintechs today, as they remain underserved by large banks — even more so at a moment of high interest rates and creeping default rates.

State of play. Between 2018 and 2022, the number of legal entities with a bank account increased from 11.4 million to 17.5 million — the largest jump on record (dating back to 2005). Also, a much more significant advance than the 18.9 percent increase in the number of individuals with bank accounts (188.3 million) in the same period.

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Fabiane Ziolla Menezes

Former editor-in-chief of LABS (Latin America Business Stories), Fabiane has more than 15 years of experience reporting on business, finance, innovation, and cities in Brazil. The latter recently took her back to the classroom and made her a Master in Urban Management from PUCPR. At TBR, she keeps an eye on economic policy, game-changing businesses, and people driving innovation in Latin America.