Technology Program Country Note: Brazil

Identifying the challenges that Brazil faces in expanding branchless banking
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This paper discusses the development of branchless banking in Brazil. It highlights the sector’s challenges and opportunities.

The paper states that although Brazil is seen as a global leader in branchless banking, it still faces several challenges. While banking correspondents are present in every municipality, until recently, they have not been used as a channel for much more than bill payments. The future of branchless banking in Brazil may be driven by large, established entities in the correspondent business that have exclusive agreements with major banks. Key points include:

  • Most transactional agents are exclusive to banks, so incumbent banks, such as Caixa, Bradesco, and Banco do Brasil, with large agent footprints can create barriers to entry for newer entrants to set up wide-reaching agent networks;
  • Nonbanks may not be motivated and do not have enough regulatory space to offer mobile financial services;
  • Banks are becoming aware of opportunities at the base of the pyramid that may involve products via correspondents and mobiles;
  • In the immediate future, financial services via cell phones will get a boost from new opportunities and multiple initiatives.