Financial services platform Nubank has announced the launch of its FGTS-backed loan, a new type of secured loan for its Brazil-based clients. The new product launch was designed to align with the company’s aim to expand its secure credit capabilities and offerings in 2023, as it is gradually being made available to users who live in the region of Brazil.

The FGTS (Severance Pay Fund for Length of Service) was developed as a mandatory savings fund, in which the employees who are eligible need to deposit a certain percentage of their monthly salary. The funds can be withdrawn only during the birthday month of each of the individuals, or on specific occasions, such as making a down payment on a property, or in the cases of job loss. The interest rate will start at 1.3% per month, depending on the individual analysis that each eligible client gets on their profile.

Clients of Nubank will be given the possibility of early withdrawal of up to 12 annual installments, and the payment of the requested credit is set to occur each year, directly from the employee’s FGTS account balance. This process will take place without compromising their overall budget or monthly income. The request and management procedures of the loan will be done directly through the Nubank application, including the capability of making early repayment of annual installments.

Through this launch, Nubank also focuses on providing its clients with more secure and efficient credit options, while prioritising the process of reducing the possibilities of risks and fraud at the same time. Nubank’s recent strategy of development In September 2023, Nubank announced the launch of personal loans in Mexico, focusing on strengthening its footprint in the region. Following the launch, Mexican customers were given the possibility to access simple, transparent, and flexible loans by using the Nu application.

Furthermore, users were set to be provided with a maximum offer, as they were enabled to set the amount and payment schedule they preferred. With a complete simulation procedure, this aimed to meet the customers’ needs and demands. Earlier in August 2023, Nubank connected its infrastructure to the Banco Central do Brasil’s blockchain network, for initiating the process of testing with Drex, the Brazilian digital currency.

According to the press release published at the time, the company’s first step within its pilot project of Drex was set on node connection. This was aimed at asset tokenisation with a focus on making transfers and payments in a more simple, secure, and efficient manner. The digital version of Real represented an important step for other types of assets as well, including automobiles, in order to have a digital representation on the Drex platform.

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