In 2020, there were almost a thousand fintechs in Brazil, and this market grew 34% even during this crisis year. In the last five years, these companies received investments of US$ 2.4 billion, according to a survey by Distrito, and a good part of this was destined to offer credit, increasing competition with the big banks. However, despite the advance, the growth was not even more significant because fintechs have difficulties raising funds abroad due to bureaucratic issues. On the other hand, there is a large volume of investors interested in new possibilities since the pandemic and other economic factors have led the financial systems of developed countries to work with very low or even negative interest rates.
Chaim Finizola, Chief Growth Officer of Credix, and his partners, Thomas Bohner (CEO) and Maxim Piessen (CTO), discerned this scenario and defined it as ideal for advances to occur in the supply of credit in Brazil while international investors increase their profitability.
Credix is being launched in the country in partnership with Transfero this December. The executive reveals that he has been working with blockchain and decentralized finance (DeFi) for the past few years and understood that large global banks and financial institutions seek access to DeFi, but prioritize the concentration of credit supply among a few companies. “In parallel, investors from Western countries are looking for new investment possibilities, and Credix comes to equalize this account by increasing the capitalization of fintechs”, he says.
Credix focuses on ease of investment for credit fintechs
According to Finizola, Credix does not aim to lend directly to the end consumer, as it would need to build access to this public and develop quality credit analysis, which fintechs have already done in recent years. “That is why we talked to these companies – not yet the biggest ones, which can get direct investment from abroad – but the smaller ones, with operations of up to US$ 100 million a year. And we understand that they do not grow even faster because they have difficulty in finding more investors, due to bureaucracy, high costs, and fees, with strict conditions and manual processes”, he says.
Credix’s solution is a win-win partnership system used to design loans to these companies. The release of the funds takes place in a few weeks, and there is little bureaucracy in the process, besides some basic requirements, such as operating for more than a year and being a fintech that has already borrowed at least US$ 1 million.
The funding platform is made up of qualified investors, who access data on the line of credit requested and decide whether they want to invest in it or not. The direct contributions represent 20% of the credit, and the rest is complemented by an investment fund, where one can invest starting from one dollar. “For the first phase (alpha), which will take place in January 2022, we already have US$ 2 million to offer in a credit line to the first four fintechs we are working with, in addition to another ten already being onboarded between February and March. Therefore, by March, we plan to finance about US$ 20 million, and we should reach the end of the year with more than US$ 100 million in credit”, he says.
With funding from Transfero, among others, Credix finalized the legal part, important to enable money transfer worldwide. “We are one of the first blockchain players to connect investors with traditional money in emerging countries”, says Finizola.
BRZ, as the only real backed stablecoin, is key to the process, enabling the conversion of cryptocurrencies to the Brazilian currency. “With investments from Solana Ventures and Transfero, we want to solidify ourselves as Solana’s first major project in Latin America. We will be working together to use Transfero’s platform to convert dollars and cryptocurrencies to real, and help expand credit in other Latin American countries as well, such as Peru and Colombia”, says Finizola.