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The figures sound almost implausible. As Brazilian consumers fall behind in paying their debts, they shake a number of fintech startups In the largest economy in Latin America, a company continues to grow.

Nu Holdings Ltd. has built enough customers—more than 85 million and counting—to rank among the largest financial companies in Latin America. The online bank and credit card issuer, whose early investors include Berkshire Hathaway Inc., owned by Warren Buffett, has seen its shares grow more than 90% this year, giving it a 200-fold market value. higher than your reported profits in the last 12 months. And to protect those profits, the company has skyrocketed interest rates on its cards, reaching 790% in some cases.

Welcome to the debacle of the fintech sector in Latin America, where economic turmoil threatens to topple thousands of startups across the continent to let a few dominate. It is an abrupt turn in a decade-long career for venture capitalists in the region, and it speeds up the process of deciding winners and losers.

Nubank is among a handful of platforms, such as Mercado Pago, the fintech arm of e-commerce giant MercadoLibre Inc, that have managed to reach significant size. and stay ahead of economic shocks, while others merge to strengthen their market position. Many more are downsizing, putting their ambitions on hold or, in some cases, selling assets, suspending payments or closing operations.

In one of the starkest signs of the debacle yet, a report to be published by data provider Distrito later this month shows that the number of fintech startups in Latin America it has dwindled to just half a dozen this year, down from a high of 290 in 2018.

“With less available capital, less fintech arises,” says the executive director of the District, Gustavo Araujo. “Before, with interest rates close to zero, investors were looking for growth at any price. Now, with higher rates, investors are looking for healthy companies capable of expanding sustainably.”

Even so, Analysts are increasingly asking whether the largest fintechs will be able to sustain their staggering profitability and continue to expand.

Startups that got their start catering to lower incomes are likely to face stiffer competition as they try to lure middle-class customers away from traditional banks. In other major markets, such as Mexico and Colombia, there is now a lot of competition and tighter credit spreads.

At the end of June, in Brazil, almost 72 million people were late in paying their debts at the end, to which they have responded with an increase in interest rates on loans. By the middle of that month, average rates on revolving credit lines reached almost 350% at Nubank and 560% at Mercado Pago, according to the Brazilian central bank. Rates for individual borrowers can vary widely, and in some cases are hundreds of percentage points higher.

That is fueling a political debate

The card rates are “stratospheric”, the Finance Minister, Fernando Haddad, complained at the beginning of the year, who raised the possibility of imposing a cap. Initially, Nubank and its traditional banking rivals managed to silence the debate, after arguing that it is the only way for lenders to keep credit available in the current environment..

But last week Haddad raised the issue again, calling the commissions “disgraceful” and vowing to take action on them.

The enigma, central bank chief Roberto Campos Neto added on Thursday, is that if rates are capped, lenders will close card accounts, which could curb spending. “It’s something that you know how it starts, but not how it ends,” he said.

The reality, according to the executive director of Nubank, David Vélez, is that fintech companies are forcing banks to lower their commissions. He estimates that his company has saved customers 39 billion reais ($8 billion) than they would otherwise have paid.

When his company was founded in 2013, “financial services was a market outside the ‘realm’ of entrepreneurs, a market until now dominated by the largest companies in Latin America,” Velez said in a statement. “We broke the glass ceiling and allowed other entrepreneurs to enter this market, in different verticals. In a way, we were leaders in this industry revolution, and we are very proud of that.”

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Barbara, the daughter of Elliot and Ruth Handler, had no interest in conventional baby dolls with which girls pretended to be mommies. So Ruth, inspired by an adult toy in the shape of a woman sold in Germany as a version of a comic strip in the tabloid newspaper Bild, envisioned a highly feminine and stylized doll with which girls could fantasize about their future as adults.

In this way, Barbie was born, the doll with blonde hair and impossible dimensions that revolutionized the entire industry and is the best-selling doll in history, with more than 1,000 million units sold since its launch in 1959.

The Handler couple had launched a furniture company years before that ended up focusing on the manufacture of toys and that was called Mattel. From being a medium-sized company, barely known for a toy ukulele that was selling with some success, Thanks to Barbie, Mattel became a giant in the sector, with annual sales of more than US$5,000 million and a stock market value of more than US$6,400 million. The slender figure doll, of which its creators assure that three units per second continue to be sold, still represents about 30% of the multinational’s income.

Ruth Handler first introduced Barbie at the 1959 International Toy Fair in New York. The launch of that plastic doll with heels and a black and white swimsuit went almost unnoticed. But Ruth was also a pioneer in the marketing universe and she decided to introduce the doll in commercials featuring Mickey Mouse. This decision not only transformed the advertising model of the toy industry, but also turned Barbie into a revolution that crossed borders.

The woman-shaped doll was quickly a best-selling toy, but with it also came controversy, which has never ceased to accompany it. The toy’s curvaceous figure was attacked, criticized for fostering superficial ideals of beauty and thinness, and seen as contributing to the stereotype of the female object.

For Ruth Handler, however, the Barbie philosophy represented just the opposite. “I wanted, through the doll, the girl to know that she could be whatever she wanted to be. Barbie always represented the fact that a woman has options,” defended Ruth, who assured that if the girl fantasized about her adult life , “It was kind of stupid to play with a doll that had a flat chest. So I gave her beautiful breasts.”

The doll was a resounding success nonetheless, but Ruth Handler was forced to abruptly leave Mattel in 1974 after being accused of fraud by the SEC, the US regulator of the markets.

Years after becoming a legendary businesswoman, Ruth Handler created a new company, Ruthton Corp, dedicated to producing breast prostheses, as a result of breast cancer that she herself suffered from and from which she died in 2002 at the age of 85.

One of the purposes that Coomeva is to support its associates and their families to achieve various goals, including guaranteeing access to education. That’s the reason why Coomeva and Bancoomeva They activated the “credits with a purpose” strategy, oriented towards two objectives: acquiring their own home and financing for education.

“Education is the main engine of social, economic and cultural development for any country. In cooperativism, it is the ‘principle of principles’. That is why at Coomeva we are committed to the education of our associates and their families, through the Coomeva Educa strategy, a comprehensive portfolio that provides educational, financial and complementary solutions, seeking that no one defers their training goals and dreams”, explained the cooperative.

As reported by Coomeva, last year, 122,558 of its associates advanced in their studies, thanks to their own courses and in partnership, agreements and scholarships, of the Educate with Coomeva Program.

Another of the services are the Gente Pila and Excellence Scholarships Coomevawhere they highlighted that there are nearly 100 agreements with institutions of higher education and languages ​​at the national level, with which In 2022, $2,716 million in savings were generated for 18,773 associates and their families in discounts of up to 50% on their tuitions.

Regarding housing, Coomeva and Bancoomeva give the possibility for associates to access 100% financing of their new or used home, providing loans with preferential rates ranging from 0.89% nominal month in arrears (NMV).

“At Coomeva we believe in education as a fundamental pillar for building a better society and as a tool for social mobility. “Educate yourself with Coomeva is our cooperative commitment so that none of the associates delay their training goals and dreams,” said Juan Esteban Ángel, corporate manager of Education, Democracy and Communications of the Coomeva Group.