Loan offerings in Brazil
Nubank is expanding its secured loan offerings in Brazil to include FGTS-backed loans. The new option is being made available to those who qualify as part of the company’s strategy to broaden its safe credit offering in 2023.
In Brazil, workers are required to have access to a savings account called FGTS (Severance Pay Fund for Length of Service), into which their employers must pay a set amount each month. Employees can only access their funds in their birthday month or under certain circumstances, such as when they have lost their work or are saving for a down payment on a home.
Read: Let’s Dive Deep Into Fintech Vs The Conventional Banking
How it works?
Nubank clients who choose the FGTS-backed loan have the option of prepaying up to 12 annual payments. The requested credit is deducted directly from the individual’s FGTS account balance once per year, so there is no impact on the recipient’s regular cash flow or monthly expenses. The Nubank app handles everything from the initial loan request to monthly payment scheduling and prepayment of principal.
Read:Â Unleashing The Power: How Tech Giants Harness Generative AI Chatbots
[To share your insights with us, please write to sghosh@martechseries.com]
