Revolutionizing Brazilian financial services

A version of this article written by financial advisor Douglas Lopes was originally published in Portuguese by DCI.

The Brazilian economy has been in free fall for years. Small businesses close on a daily basis. High unemployment rates refuse to drop.

One part of the economy is still flying high: banks report increasing profit margins every quarter. At the worst apex of the current financial crisis, between 2014 and 2017, Brazil’s five biggest banks (Itaú Unibanco, Banco do Brasil, Bradesco, Santander,and Caixa) recorded combined profits of more than BRL$244bn. If people are spending less, how are banks doing so well?

Graph from The Brazilian Report demonstrates the market share held by the five largest banks in Brazil.

Money hungry banks

Many people don’t realize that banking fees and interest rates are higher in Brazil than anywhere else in the world. Banking fees rise at rates higher than inflation every year. Up to a quarter of banks’ profits come from fees. Brazilians paid more than BRL$27bn in fees in 2017.

Many low to middle-income Brazilians spend as much as 20% of their monthly salary on banking fees. When loan repayments are late, interest rates spike in a dizzying fashion, and people often pay double the retail price of an item after all is said and done.

Minimum wage in Brazil is not higher than anywhere else in the world. So, why do Brazilians proportionally pay more for banking than people around the world?

Demographic barriers

Up to two billion people living in emerging markets around the world are either unbanked or underbanked, including close to half of the population in Brazil. Without access to personal credit or formal financial services, daily life is on a cash-in-hand basis and savings are unheard of.

When a financial emergency arises families are often forced to pawn precious heirlooms. Options are limited and sometimes force Brazilians to get loans from money lenders or even local drug traffickers. These loans also have interest rates, and late repayments can have sordid consequences.

So, is the future of Brazilian banking only gloom?

It’s highly unlikely that Brazilian banks will change their mentality any time soon. Banking fees and interest rates on personal credit will continue to spiral, and faceless bankers will continue to line their pockets with increasing profits.

That’s why Airfox is a breath of fresh air, and I’m delighted to be a part of this innovative team.

Airfox’s Brazil team, where Lopes (second from the right in the back row) is located.

Here’s a company established only three years ago by a young Brazilian who experienced first-hand poverty throughout his childhood in Belo Horizonte. Victor Santos watched his underbanked parents struggle to pay immigration-related legal bills after they moved to the US.

His mission, which I’m proud to be part of, is to bring affordable financial services to families in Brazil and beyond.

Our innovative solution

It’s time we get rid outlandish fees dictated by greedy bankers. Airfox has created a fair and free banking solution.

Users of the Airfox app banQi, launched in Brazil in June, can make and receive payments easily without paying a single cent in transaction fees. banQi can be used to pay utility bills, add credit to mobile phones and travel tickets, and soon will be offering other features to make banking easier for all Brazilians.

Brazilians who may have been ignored by traditional banks now can bank with banQi

As our family of banQi users increases across Brazil and around the world, we plan to offer a personal loan feature where one user can offer a loan to another. No more lengthy loan applications to fill out, no more interviews with angry bank managers. Forget the pawn shop.

Data collection for human empowerment

Our plans include using machine learning processes to calculate the risk attached to micro-loans for Airfox users with the capital sourced from a peer-to-peer platform without the need for borrowers to pay exorbitant interest rates. Algorithms would use certain user behaviours, like paying utility bills on time, to decide the risk level attached to a loan request. Airfox borrowers would then be placed into low-risk and high-risk groups, with accompanying interest rates.

Gaining trust

The strategic partnership Airfox struck with Via Varejo is testament to the trust Airfox has already garnered in Brazil. Thousands of Casa Bahia customers can now use Airfox to make monthly payments, removing the need to waste time in endless queues at banks and lotericas.

Brazilians were forced to wait in long lines to pay their bills before Airfox provided a banking solution

Airfox is an amazing initiative which will empower millions of families, specifically those living in Brazil’s favela communities. These are citizens who have traditionally been excluded from the formal city on many levels who now are finally getting the right to manage their own hard-earned money.

A final message

I’m personally proud to be part of the Airfox revolution. I’ve worked in many big national and international corporations over the past 20 years, handling corporate deals and acquisitions worth millions of dollars.

Douglas joined Airfox as a financial advisor

To work for a company like Airfox is simply a breath of fresh air. Here is a company that wants to make a difference in the world, has the trust of investors, and has already made huge strides.

The possibilities are endless. Finally, we can do something to democratize access to credit in Brazil. We can help to empower working class families. Airfox is a company with a conscience, and we plan to leave a long lasting legacy in Brazil and beyond.

Learn more about Airfox’s initiatives to serve the underbanked, as well as about our quickly growing team on our website.



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Accelerate financial inclusion in emerging markets using technology built with trust and inclusion.