RIO DE JANEIRO, March 30 (Xinhua) — A bank born digitally in a Brazilian favela, with the intention of being able to help entrepreneurs in the country’s poorest neighborhoods, will soon open physical branches in four states, seeking to be a development bank for the most disadvantaged.
Born in the Paraisópolis favela, in Sao Paulo, the G10 opened its first physical headquarters last month, in the same community where it grew up. And now he will repeat the process in Heliópolis, the largest favela in Sao Paulo; Sol Nascente, the largest favela in the country in the Federal District; Aglomerado da Serra, in Belo Horizonte, and Casa Amarela, in Recife.
As G10 general director Gilson Rodrigues explained to Xinhua, the bank offers digital accounts and loans to residents of favelas, with the ultimate goal of being a development bank that supports entrepreneurs in Brazilian neighborhoods.
“It is like the state development bank, but for favelas, making access to credit less bureaucratic,” said Rodrigues, highlighting that one of the main advantages of the bank is that it turns out to be flexible enough to deal with living conditions with little formality, an obstacle in traditional banking, which usually requires documentation such as proof of residence and income.
Credit evaluation is measured by criteria that include the relationship with the community, the level of investment planning and income, taking into account possible financial instability.
For Rodrigues, the methodology was developed with the support of the Central Bank. “It was created so that people in the informal sector can have access,” stressed the general director.
According to a survey conducted by NOS Pesquisas, 32 percent of Brazilian favela residents complain about delays in credit approval by banks and 29 percent have difficulties accessing loans due to their financial history. . Furthermore, 77 percent of this population has already had to negotiate overdue debts to have their name removed from the negative registry.
The initial idea, says Rodrigues, was to create an institution that would issue a local currency for circulation in Paraisópolis, like other community banks, but the idea was abandoned due to the risk of counterfeiting.
“We decided not to make the currency, but we thought about creating a card. We created a credit card called Nova Paraisópolis. That card no longer exists. But we made it work. There were 11,000 people with access to credit for an average of 300 reais ($60 ),” he recalled.
From that experience, the bank project emerged, which is organized around four legal entities to offer various services, such as consortia, digital accounts and credit.
“We model the consortia based on the desires we see that residents have, which sometimes are not fulfilled,” Rodrigues explained, citing travel, surgeries and the purchase of mobile phones, motorcycles and cars as examples.
Having your own home is the desire of 34 percent of favela residents, according to the NOS Pesquisas survey. 33 percent believe they need to organize their retirement. And 24 percent do not have a secure source of income.
G10 Bank currently has about 5,000 clients, with the goal of reaching 20,000 by the end of the semester. According to the general director, loans worth 1 million reais ($200,000) have already been granted to 200 businessmen.
The plan to open branches is part of both the strategy of expanding the number of clients and the project’s philosophy of inclusion.
“We are aware that digital is the future, but we need to create a tasting space, so to speak, where residents feel safe, where they can go talk to the manager, where they can have a real relationship,” he noted about a decision “against the grain” of the large banks, which have reduced in-person service.
“It continues to be essential for a population that has access difficulties, that is illiterate or semi-literate and that culturally is not accustomed to digital,” said Rodrigues.
Among favela residents, 2 percent never use the bank application and 1 percent still do not make payments with Pix, for instant transfers via mobile phone, according to the NOS Pesquisas survey. However, 61 percent of this population has a digital account and 60 percent make transfers with Pix daily. Only 9 percent withdraw money from ATMs daily.
2024-03-31 02:07:36
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