B2B Payments

Alt-Lender Tackles Brazil Market

When it comes to alternative lending, Brazil is not commonly chosen as the world’s largest or most successful market. But that doesn’t mean that demand doesn’t exist in the nation. And late last week, one alternative lending platform decided to launch in the country to meet small business lending demand with little competition.

Lendico announced Friday (July 17) that it would open its small business peer-to-peer lending marketplace in Brazil after a $20 million funding round closed earlier this year. The launch in the South American country follows Lendico’s partnership with local bank Banco BMG, reports said.

“In Brazil, we have won Banco BMG as a strong local partner,” said Lendico CEO Dominik Steinkühler in a statement. “This allows us an optimal market entry. Time is ripe for a change in the loan markets to enable borrowers access to better products.”

The company’s Brazil CEO also emphasized the rising demand among Brazilian small businesses for alternative lending products. “In the Brazilian markets, banks are demanding enormous interest rates from borrowers,” said Lendico Brazil CEO Marcelo Ciampolini. “With our lean cost structure — 100 percent online, no branches and with innovative technology — we can hand over these cost advantages to the borrowers and offer them better terms.”

Ciampolini added that Lendico offers SME borrowers more competitive rates than traditional bank lenders, one of the key selling points that has led to the rise in alternative lending players in markets across the globe.

Lendico, based in Germany, first revealed in May that it secured a $22.5 million investment from an array of backers, including Rocket Internet, Access Industries and HV Holtzbrinck. At the time, Lendico did not reveal that it would look to expand its service in Brazil and instead said that it would use the funds to strengthen its lending technology and long-term vision, in which small businesses would no longer need traditional means of financing.

At the time, Steinkühler did say that Lendico secured “another experienced strategic partner,” though did not specify whether that partner was Banco BMG. “Together we share the belief that in order to originate loans to consumers in businesses in the future, banks are no longer needed,” he said in May.

But despite this belief, Lendico appears to have not yet given up on the need for traditional banks, considering its officially announced partnership with a traditional lender in Brazil.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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