Nubank has revolutionized digital banking in Latin America. But the foundational ingredient to the bank’s incredible growth lies elsewhere, in something a little more humdrum, a little more fundamental: credit.
Not many digital banks actually like credit. Some offer credit reluctantly, such as Banco Pan, who’s CEO, Eduardo Carlos Guimarães, told Euromoney last year that “the credit-card business generates a loss, not only to Banco Pan but to the market as a whole”.
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Others don’t offer it at all.
Others embrace it. Brazil’s Creditas, for example, specialises in secured credit – in this case loans secured by car or home equity.
All these approaches can lead to strong, profitable businesses. But they don’t bring you 1.5 million customers a month, which was the run-rate of Nubank in 2023.
“Most of the digital banks in Europe and the US are often more ‘wallets’ – more payment and debit companies rather than full consumer credit houses,” says Guilherme Lago, who has been with Nubank since March 2019 and been CFO since February 2021.
“Credit
