LatinFinance - November/December 2016 - 30

"Fees and commissions are very complex to understand in Brazil, but we exempt
our clients from most of them," Conrade
says. "There are no monthly fees and no
charges for opening an account or for
maintenance."
Banco Neon charges for cash withdrawals and bank transfers but it waives the
fees on the first of each transaction every
month. The bank provides debit cards so
clients can access their accounts and make
electronic transfers, but it does not offer
credit. It also allows clients to invest in a
simple financial instrument that delivers
80% of the DI interbank interest rate. The
bank has no branches and has a staff of 50
in São Paulo and another 30 in Belo Horizonte, mostly working in IT, Conrade says.
Pulling power
Banco Neon's growth offers a textbook example of how a startup can take advantage
of opportunities in the market, but it is not
the only fintech to make waves in Brazil.
The industry attracted 200 million reais
of investment last year, according to FintechLab, a local consultancy. That could
reach 450 million reais this year, it predicts.
Venture capitalists and angel investors are
participating, but Brazil's large banks have
also spotted the trend and are funding
innovative projects. Marcelo Bradaschia, a
partner at FintechLab, says there are 350
to 400 fintechs in Brazil, with perhaps half
of them already in operation. About one
third focus on payment systems, followed
by financial planning and credit as the most
popular segments, he says.
For Marcelo Ciampolini, who heads the
local division of the German peer-to-peer
lending platform Lendico, "2015 was the
year when the fintech sector boomed in
Brazil." If Banco Neon has set its sights on
banking fees, Lendico aims at high-quality
borrowers in a credit market where good
and bad payers alike are thrown in the same
basket because of rising default rates.
"We started to look at Brazil in 2013 and
we identified a huge opportunity, thanks
to the sheer size of the market and the
very high level of bank interest spreads in
the country," Ciampolini says. By focusing on Brazil's top two income brackets
and granting loans to select applicants,
Lendico manages to charge less than half
the market rates, he says. In about a year,
Lendico has received loan applications for
more than 5 billion reais and lent around
30 million reais. Lendico provides loans of
up to 35,000 reais to be paid back in 12, 18

30 L ATINFINA NCE.COM - November/December 2016

or 24 months. Delinquency levels are below
2%, which is around 10 times lower than
the consumer finance market as a whole,
Ciampolini says.
The online payments platform Vindi
has found a niche by getting its customers around often cumbersome payment
procedures in Brazil. "We are an integrated
payment structure that allows clients to sell
their products and services in whatever
way they want and wherever they want,"
chief executive officer Rodrigo Dantas says.
Dantas and his partners created Vindi in

The new tech threat
Brazilian fintech companies, by sector
Insurance (5%)
Bitcoin/Blockchain (5%)
Financial efficiency (7%)
Payments (31%)

Investments (8%)

Funding (10%)

Credit (16%)

Financial planning (18%)

Source: FintechLab

RODRIGO DANTAS, VINDI

"THEY WANTED TO
TAKE FULL CONTROL
OF THE COMPANY.
BUT I PROMISED
MYSELF THAT I WOULD
NEVER WORK AGAIN
IN AN ENVIRONMENT
WHERE YOU NEED TO
WEAR A SILK TIE TO BE
RESPECTED"

2013 as a subscription payment platform
commissioned by a foreign company that,
in the end, gave up on its plans in Brazil.
From there, Vindi evolved to offer automated payment services. Brazil lenders
usually issue invoices called "boletos" to
their clients, who send them to their customers along with payment instructions,
Dantas explains. The companies then have
to issue tax invoices, settle payments of the
boletos and chase any late payments. If card
payments are involved, a slew of acquiring
banks and other players also get involved.
By incorporating the whole process in the
Vindi platform, Dantas says clients only
need to work with his company and an
acquiring bank to manage payments. Vindi
issues invoices, settles accounts and monitors late payments. One client, a consulting
firm, has cut the time it spends each week
on payment orders to 90 minutes, from
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