H.M. Queen Máxima of the Netherlands today concluded a three-day visit to Brazil in her capacity as the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA). She met with numerous public and private sector leaders to collaborate and offer support on inclusive finance priorities, to reinforce the importance of financial health, as well as to discuss how the digital finance ecosystem can benefit all.
The UNSGSA spent the final day and a half of the visit in Brasilia holding discussions with Minister of Finance Fernando Haddad, Banco Central do Brasil (BCB) President Roberto Campos Neto, Social Development, Assistance, Family and Fight against Hunger Minister Wellington Dias, and Caixa Econômica Federal (CEF) President Rita Serrano.
High on the agenda was how to build upon the momentum for financial inclusion in Brazil, where 84% of adults now have access to a formal financial account (Findex 2021)—representing a rise from 70% in 2017 and 56% in 2011. Queen Máxima emphasized the importance of Brazil’s ongoing pro-competition approach to developing an inclusive digital finance ecosystem and infrastructure, such as the interoperable payments like Pix. She also noted the emerging open finance regime that can help private sector innovation thrive. These have been key enablers in reaching underserved groups like the poor, women, smallholder farmers, and small businesses.
The next crucial step for Brazil could be leveraging financial access to enhance the financial health of Brazilians, said the Special Advocate.
Financial health is a critical issue in the country. The average financial health score for a Brazilian adult suggests a low level of financial health, indicating early signs of financial difficulties and a high risk of financial stress (2022 Brazilian Financial Health Index Survey, I-SFB). And nearly 80% of adults in Brazil surveyed (Findex 2021) stated they are worried about not having enough money for monthly expenses or bills, as well as not having sufficient money for old age.
The UNSGSA noted during meetings that people need to be able to better manage their daily financial responsibilities, build resilience to shocks, achieve long-term financial goals, and foster a sense of security and control over their finances. Further, the Special Advocate said it is key to ensure that financial products and services do not lead to harmful outcomes.
Brazil is at an important juncture where it is can consider financial health in various policies and regulations, as well business strategies. The UNSGSA highlighted that taking a financial health perspective can contribute to the long-term success and sustainability of an inclusive Brazilian financial sector. The flourishing fintech innovations, along with commitment from private sector leaders to address the issue, have the potential to significantly enhance Brazilians’ financial health and serve as a model for other countries.
Across meetings, the Special Advocate also encouraged the country’s efforts in data sharing and consumer protection to keep pace with digital financial risks from innovation.
On Wednesday morning, Queen Máxima, along with BCB President Neto, traveled to a local elementary school to learn more about a BCB financial education program, called Aprender Valor, hearing from students participating in the initiative. The UNSGSA spoke with the children about the importance of budgeting and saving, as well as stressed the need for financial knowledge to build long-term financial health.
Prior to Brasilia, the UNSGSA spent a day and a half in São Paulo, engaging with leading private sector actors. She heard their perspectives on the role of financial services providers in boosting Brazilians’ financial health. The Special Advocate co-hosted a roundtable with Banco Santander (a member of the CEO Partnership for Economic Inclusion) on financial sector solutions for consumer financial health. She also convened a public-private sector roundtable on ensuring the positive impact of innovations like Pix and Open Finance, especially for low-income customers.
Additionally, Queen Máxima conducted two field visits to meet with businesses and clients of innovative financial services providers to discuss their firsthand experiences. This included meetings with Kovi and Dinie to meet with entrepreneurs and small business owners.
For example, Luciana Reís, who opened a small restaurant called Barraca da Lu Lu in 2017, told the Special Advocate that she has been navigating the ups and downs of running a restaurant during a pandemic and economic downturn. During COVID-19, she needed credit to continue paying her bills, so she applied for a loan through Dinie, a pioneering fintech that offers embedded lending and digital working capital to MSMEs and merchants on an e-commerce platform. It was approved within a few days, giving her the capital to keep her restaurant open during the pandemic and develop a delivery channel on iFood. According to Luciana, Dinie’s low-cost, easy-to-access loan has made all the difference.
Meanwhile, at Kovi, an auto financing company with a non-traditional approach that make it easier to access a loan for a car for groups traditionally underserved by the formal financial system, Queen Máxima spoke with ride-hailing app driver Luisa Pereira. Luisa told the UNSGSA that she credits Kovi, and its financing model, with giving her a new lease on life. After she left her marriage and no longer had access to the car, she was able to start driving and get back to work after obtaining an auto with Kovi.
Partners from the UNSGSA’s Reference Group that supported technical work on the visit included the Better than Cash Alliance, the Bill & Melinda Gates Foundation (BMGF), the Consultative Group to Assist the Poor (CGAP), and the World Bank Group.