Government-owned company Caixa Econômica Federal plans to create a new digital bank in Brazil next year.
The new financial institution will be a separate company from Caixa and will go public (sale of shares) in Brazil and abroad, according to an announcement of Caixa’s president Pedro Guimarães when presenting the bank’s results in the third quarter.
Since 2015, fintechs has created the first unicorns of the country in Brazil, with Nubank as one of the most notable examples. The case of Caixa is pretty different because the company is not a startup venturing into the financial sector, its a state-owned company.
Read also: Nubank expanded to Colombia
New digital bank in Brazil, created by an old familiar bank
Caixa has been part of the Brazilian financial market for a long time. Since 1861, the bank has been the preferred financial institution for the lower classes. Even slaves used the bank for saving money and paying its freedom.
The Central Bank and Caixa’s Board of Directors still need approval for the digital bank to be launched. “We are discussing internally. There is a consensus that this is a key point for the future of Caixa Econômica Federal. There is already an initial conversation on the board of directors and some conversations at the Central Bank, ”said Guimarães.
The president added that he expected to have the approval to launch the bank in six months. According to Guimarães, the new institution, which already has 100 employees, will count on the digital accounts opened by Caixa at the beginning of the operation.
Guimarães stressed that the digital bank will mainly offer three services: payment of social benefits; release of microcredit to at least 10 million customers; and mortgage loans for low-income families. “In low-income housing financing, there are over 5 million customers who will use the [Caixa Tem] application to pay bills, bills,” he said.
Social benefits are paid through digital social savings and the movement of resources is made through the Caixa Tem application. 35 million beneficiaries are using the application.