BRAZIL Trends and Developments Contributed by: Roberto Panucci Filho, Tiago Severo Pereira Gomes, Diogo Octavio Nebias and Guilherme Teles, Panucci, Severo e Nebias Advogados
mobility platforms are expected to formalise white- label banking propositions with SCFIs and mid-sized banks, while larger institutions focus on multi-partner BaaS ecosystems. For foreign clients, Brazil offers a unique BaaS market, thanks to high digital adoption, a regulatory authority that actively embraces embedded finance, and a pop- ulation receptive to banking through non-traditional channels. But the message is clear: design for regula- tion from day one. Finance Companies 2.0: New Framework for SCFIs In July 2025, the National Monetary Council ( Conselho Monetário Nacional , or CMN) approved Resolution 5,237, modernising the regulation of SCFIs. The rule consolidates scattered norms into a single rulebook and recasts the SCFI licence so finance companies can operate as digital-ready, multi-product institutions spanning lending, payments, purchasing, funding and related services. Structural requirements All SCFIs must be incorporated as corporations, adopt robust governance, compliance and risk frameworks, and meet fit-and-proper criteria for officers. Minimum capital is BRL7 million, with a 30% reduction for insti- tutions headquartered outside São Paulo and Rio de Janeiro – signalling a policy push for regional develop- ment. Reporting and controls are similar to mid-sized bank standards. Expanded scope of activities The reform of the SCFI licence expands the scope of finance companies’ activities, as follows. • Credit – traditional consumer finance (eg, vehicle loans, payroll-deductible loans, point-of-sale instal- ments) plus fintech-style products such as Buy Now, Pay Later (BNPL) and digital instalments are covered by the SCFI licence. • Acquiring – financial companies are now author- ised to act as purchasers, processing consumer payments directly. • Funding – the SCFI licence supports a diversified liability strategy: issuing bank deposit certificates ( certificados de depósito bancário , or CDBs), real estate credit notes ( letras de crédito imobiliário , or
LCIs), financial bills ( letras financeira , or LFs), inter- bank deposits and even foreign funding. This is a key differentiator from SCDs, which can only lend their own capital. • Fiduciary roles – finance companies may act as fiduciary agents and administrators in structured finance, supporting receivables finance and secu- ritisation. The result is a single corporate vehicle that can origi- nate credit, run payments, process purchases and diversify funding. Why it matters This is more than housekeeping; the reform creates a scalable, modular licence that bridges fintech lend- ers and full-service banks. Players that outgrew nar- rower licences (SCDs/SEPs or pure payment institu- tions) can consolidate within one prudential perimeter, reducing duplication, clarifying oversight, and pre- senting cleaner structures for investor due diligence. Comparisons with other licences With broad functional scope and prudential oversight at lower capital thresholds than banks, SCFI licences now serve as a mid-point between: • SCDs/SEPs – streamlined but limited (no deposit- like funding and no full payments stack); • payment institutions – strong on transactions, no broad lending powers; and • banks – widest scope, with heavier prudential bur- den and capital thresholds. Implications for foreign entrants SCFIs offer a credible, cost-effective entry route – ie, operating consumer credit, payments and purchasing without a full bank burden. The recognised pruden- tial perimeter simplifies capital raising (private credit/ equity) and supports joint ventures, acquisitions, or
greenfield projects. Challenges ahead
Migration demands investment in risk systems, inde- pendent governance and internal controls. Competi- tion should intensify as larger banks deploy SCFIs as focused vehicles for consumer and embedded-lend- ing niches, pressuring smaller fintechs to differentiate.
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