‘Violence is the worst problem you can have in a society,’ explained Vitor Kneipp, 2017 MBA at Saïd Business School, University of Oxford, corporate lawyer and co-owner of Banco Maré. ‘It disrupts trust, which is a vital element of capitalism.’
Vitor believes that a lack of trust has held the favelas back from the country’s financial system. ‘Banks cannot set up outlets in these areas, as the heightened risk of violent crime means they are unable to secure insurance,’ he explained. ‘So residents must travel many miles to pay their bills. The journey can involve crossing territories of different criminal factions, which can be dangerous, not to mention costly in both time and money. Conditions like this mean approximately 42% of Brazil’s population does not have access to basic banking services.’
Vitor’s fellow co-owner Alexander Albuquerque spotted a potential solution to the problem. ‘He brought his laptop into favelas, routed it through his mobile, and started paying peoples bills for them,’ explained Vitor. ‘In the first month, this amounted to about £15. Fourteen months later, we are processing £160,000 a month for 6,000 customers who are either using our app, or visiting one of our four agencies in the favelas.’
Banco Maré’s potential to disrupt the banking industry has not gone unnoticed: they were recently listed among the top 15 most disruptive FinTech organisations in Brazil by Caixa, the country’s largest state bank.
Vitor’s reasons for undertaking an MBA stem from his childhood, during which he developed close personal connections to residents of Brazil’s poorer suburbs: ‘Growing up, I always believed that as a family we were not well off – we lived in the same flat all my life, we had an old car,’ he said. ‘But as I grew older, I realised just how deep the social divide is, and that I was in a privileged position compared to millions of Brazilians. This inequality is something I’m determined to change, and the skills and connections I will gain from my Oxford Saïd MBA will help me achieve this.’
Banco Maré’s rapid expansion has come at an opportune time. The younger generations of the favelas have access to more cash than their parents, and Vitor describes how some of the start up’s customers will come to them with the latest iPhones at hand: ‘So, there is an increasing amount of cash in the favelas. However, it is the habit of saving, and of interacting with the financial system that we are trying to introduce,’ he said.
‘The culture within the favelas is one in which people put their faith in the people they know,’ continued Vitor. ‘So to trust that a payment has been made, without seeing the other person or getting a paper receipt does not come easily to them. We are getting around this problem by staffing our agencies with local people, whom the other residents can recognise. The staff encourage customers to migrate from making payments in agencies, to using the app, which allows the agencies to focus their attention on bringing in new customers.’
It is Vitor’s hope that Banco Maré will help bring Brazil’s forgotten communities into mainstream society. ‘Our mission is to provide financial structure to people’s lives, and to help them overcome some of the problems in the local communities,’ he said.
The risk of criminals using Banco Maré’s system for nefarious purposes could have made their work impossible, but the initial security framework designed by Maer Melo, senior software engineer at Twitter, has allowed the company to protect their transactions during their start up phase.
‘Developing a Blockchain structure is the next step to allow growth with transparency and protection from activities like money laundering,’ stated Vitor. ‘We have a competitive advantage over the big banks. They need to spend a huge amount of time and resources converting their data to Blockchain, but we will be able to start working with it from the ground up.’
The start up is now seeking series A funding to grow their operation. Vitor hopes that with such investment, Banco Maré can take its work beyond the borders of Brazil. ‘There are 55 million people who could benefit from our services in Brazil, 200 million only in Latin America. Across the planet, this number becomes 2 billion,’ he said.
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