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Nubank splurges US$3.8 million to help cash-short customers

Don't worry, we speak : Español (Spanish), too!

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ContxtoNubank is following the admirable lead of other Latin American unicorns and taking big steps to safeguard their people during the pandemic.

I say “their people”, because different companies have different spins on who they’re worried about. Brazil’s Loft is looking to help their workers—and eventually their customers—while business is languid.

Similarly, Nubank has announced that is has created a R$20 million (US$3.8 million) fund to help their customers keep afloat during this crisis. It will be made available for health- and mental care services provided in partnership with Nubank’s strategic alliances.

The Brazilian challenger bank has dipped into the kitty previously reserved for its marketing budget. Additionally, in a bit of a humblebrag, the company also claims that money also came from prior efficiency savings.

Checking in, not checking out

A few weeks ago Nubank sent a very nice email out to its customers. It basically said something like: “Hey, are you alright? We know things are tough, so do tell us if you are in need of anything.”

It was so kind, out of the blue, and contrasting from the reactions of some traditional banks, that the email would have been nice enough. However, clearly Nubank’s listening exercise was serious, because we can now see some of the concrete responses it has taken from its initial efforts to reach out.

Have a look at the key players the challenger has teamed up with to help out:

iFood and Rappi: Nubank is giving credit to customers short on cash and in need of essential goods. The fintech will foot the bill and the cost of delivery.

Sirio-libanés Hospital: 1,000 remote “tele-appointments” will be paid for in full for Nubank customers by the hospital. The fintech will cover the rest if need be, meaning that there’s no need to rush, there will be enough slots for all.

Zee.now: The furry citizens of Rio de Janeiro and São Paulo will not be going hungry. Nubank has offered to pay up to R$100 (US$19) in pet food and animal items. 

Put this all together and you’ve certainly got a lot of (cumulatively) rather expensive stuff. Though doubtlessly a useful initiative, one wonders how long the US$3.8 million pot will last… Hopefully, more than this crisis, although that is doubtful. 

It is clear that size matters when it comes to how well fintechs can deal with these current financial times. Nu is splurging as other neo-banks and challengers are making pretty significant cuts.

So, the bigger the better, right? Well, problem is… isn’t this how we get to “Too big to fail”? The paradoxes of crisis economics.

Wanna hear more? We recommend you listen to the following podcast episode: Detrás del mensaje. You can find the time stamp available in the description.

-AG

Alejandro González Ormerod
Historian, writer, and editor from Mexico City. He was a book publisher, academic, and cheesemonger before joining Contxto. Still deciding on which Latin American country to visit next; food and fun are the main criteria.

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