The ten largest Brazilian slums’ consumption potential is BRL 159 billion. In them, 262,000 commercial establishments move the local economy, shows a study by Outdoor Social, reported by LABS. This billionaire potential is still underexplored by the large brands. Newcomers such as the delivery service TrazFavela and the newly-launched fintech G10 Bank are trying to change this scenario and make the economy flourish in the country’s largest peripheral communities.
“G10” is a group of leaders from the ten largest favelas in the country that launched the G10 Bank last month, a fintech aiming to bring credit to people in the favelas. “We decided that, from this power of the slums, we should act in blocks to attract investments and companies; like the rich G7 countries that do not act in isolation, we can make the favela prosper,” explains Gilson Rodrigues, president of G10 favelas, in an interview with LABS.

“Great businessmen lack the view that cool things to invest are emerging on the periphery, and that this could bring visibility to these communities. The periphery has money and can strengthen it [this movement], helping people within the favela,” says Iago Santos, CEO and co-founder of TrazFavela, to LABS. “During the pandemic, many peripheral people were donating to other people in the periphery. Everyone was winning and turning the economy around.”
The GDP of Brazilian favelas is higher than that of several countries in Latin America. Yet, the Brazilian favelas are seen as needy and not as powerful as they are, according to Rodrigues. “There are still many difficulties accessing credit; sometimes we are treated as a different customer. It is as if the BRL 50 of a person from Morumbi (noble neighborhood of São Paulo) was worth more than the BRL 50 of those who live in the slum of Paraisópolis.”
Like Rodrigues, Santos also realized that the company that is not yet investing in the favela is losing money, opportunity, and a chance to expand its market. With this thought in mind, he created TrazFavela, a Rappi-alike service, a ‘deliver anything’ service that targets businesses and customers in the favelas. “It bridges merchants’ sales to users from the peripheral areas in the Brazilian city of Salvador.”
Santos saw the opportunity for a business like this when he realized he could, as a user, managed to order through large apps in the central region of Salvador, where he worked as a graphic designer in a startup accelerator, but that these same apps did not operate where he lives, the São Caetano neighborhood, on the outskirts of the city.
“I saw that my neighborhood had great economic potential, not only for food, but also for businesses that sell other things. I always say that I don’t have to leave my neighborhood to go to the mall; I have everything I need there.”
Santos participated in several startup competitions, such as Startup Weekend, and the accelerator Vale do Dendê. With his partners, Marcos Silva (CTO) and Ana Luiza Sena (COO), he launched the delivery service with their resources. Currently, it works without an app, but the app is in the process of being launched soon, according to Santos.
About 85% of the couriers that work with TrazFavela live in peripheral regions. They are called via WhatsApp by TrazFavela, which connects them with businesses from the outskirts of Salvador. Now, TrazFavela also operates in the city’s noble areas and the metropolitan region of Bahia’s capital.
The startup was selected by the Google For Startups initiative for Black-founded and led startups in Brazil and will use the program’s resources to develop its app. Santos intends to take the app to the East and North of São Paulo, and Rio de Janeiro’s favelas such as Complexo do Alemão, Rocinha, and Vidigal, where he has already been in contact with retailers.
The idea is also to increase TrazFavela’s presence in Salvador and take the app to other capitals of the Brazilian Northeast such as Recife, Maceió, São Luís, Aracaju, between 2021 and 2022 as well. In 2020 (when it started to operate without an app), TrazFavela brokered 2,500 deliveries, 500 in June alone.
Santos is also looking at an upcoming investment round to expand to Latin America. He sees great potential for TrazFavela in the peripheral areas of Buenos Aires and Bogotá. “Most of the apps have the same problem of not wanting to serve merchants from peripheral areas because they take the whole area as a risk area. But I’m from a peripheral neighborhood; I know that in my neighborhood, there is no danger.”
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How does G10 Bank work? Favela money generating money for the favela

According to Rodrigues, the idea of the G10 Bank came together with nine other initiatives to support the economy of the favelas during the economic crisis as a result of COVID-19.
An estimate by Data Favela and Locomotiva institutes shows that 13.6 million people live in Brazil’s peripheral communities. Added to the health crisis, the economic crisis mainly affects these people, says Rodrigues. “This so-called new normal is a new normal in which hunger and unemployment have increased. In which the situation of abnormalities has been pointed out as if it were something normal. So the new normal considers that people are going to go hungry, that people will be unemployed, that we will live in small houses lacking water, with more difficulties,” he said. That’s where G10 will act to reverse.
How will the G10 Bank work in Brazilian’s slums?
The G10 Bank will operate throughout Brazil through a digital platform. For the time being, it works in a pilot format in the favelas of Paraisópolis and Heliópolis, in São Paulo. “We intend to serve 120 entrepreneurs in the first half, starting from the ten largest slums that are part of the G10 leaders’ block.”
Rodrigues’ idea is to reach all the favelas in Brazil in a short period. The fintech, which received investments of BRL 1.8 million from non-disclosed investors, aims to facilitate access to microcredit with up to BRL 15,000 for entrepreneurs that live in slums.
Today, Brazil has 103 community banks offering microcredit, according to the Banco Palmas Institute. But G10 Bank’s ambition is to promote business in the favela as if it were the Brazilian Development Bank for slums. G10 is inspired by the model of Bangladeshi economist Muhammad Yunus, who won the Nobel Peace Prize in 2006, to offer credit to low-income families to promote activities that generate income within the community itself.
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Traditional banks usually demand economic and income history, which does not include credit for people from peripheral areas. The differential of the G10 Bank is to have a look turned to the public of the favela. “It is a great cycle of the economy that is being created and fostered from the G10 Bank,” adds Rodrigues.
The fintech will be composed of entrepreneurs, economists, and financial market professionals, who will offer mentoring, training, and a work plan so that businesses can be scaled in other favelas. Mainly of those founded by Black and young women – “who are the ones to whom the big traditional banks usually deny the credit. So, we are doing an inclusion program.”
During COVID-19 pandemic, G10 created ‘street president,’, where every 50 houses have a volunteer favela resident who takes care of another 50 families. The group is making these street presidents into financial education teachers.
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In the Paraisópolis slum alone, 658 financial education teachers will be informal guarantors of the G10 Bank, that is, who will validate the credit for these families. “We are considering that through this network, through this contact and approximation, we will be able to help these entrepreneurs with training, mentoring, and money. From that, entrepreneurship transforms life, it generates wealth, work, and income for itself, but it also creates jobs for the community and consequently development.”
Another idea of G10 Bank is to connect with companies to offer cards and POS, besides life insurance and funeral assistance. Although highly sought after by financial institutions, Rodrigues stresses that the G10 Bank is looking for partners who understand the business’ social purpose.
“When it comes to proposals that put abusive interests or proposals to exploit the community or businesses that come here [in the favela], make a quick buck and go away, it doesn’t work for us. We want G10 bank to be profitable and sustainable, but that it also donates resources to the community, and that the group of people who participate in it is engaged in the same purpose of social transformation.”