ImpactAlpha, April 6 – Most of Brazil’s 211 million people now have access to financial services, but only about a quarter are able to borrow money via credit cards or banks, according to the World Bank. FinanZero launched five years ago to boost Brazilians’ access to credit.
Rather than providing the financial services itself, which is how many financial services disruptors enter the market, the Sao Paulo-based fintech acts as a loan broker with mainstream banks and other fintech companies.
A group of Swedish investors backed the company’s $7 million funding round.
The cost of credit in Brazil is notoriously extractive, with annual interest rates averaging 300%. (The Brazilian government has taken up legislation to set a credit rate cap.)
FinanZero’s platform supports consumers in securing lower rates by increasing competition among lenders. The platform also does not charge application fees, and instead takes a commission from lenders.
Still, only about 10% of applicants get approved for a loan, TechCrunch reports.