Ricardo Guimarães is the current President of the family owned bank known as BMG Bank in Brazil. Guimarães is the brains behind the recent success of BMG Bank in terms of record profits. Brazil is going through an economic crisis, but BMG Bank is having a banner year thanks to the Bank’s focus on consignment credit.
According to Mr. Guimarães, the consignment credit industry in Brazil is a $R130 billion industry, and BMG bank has an 18 percent market share in that industry. The banking business in Brazil is very competitive, but Guimarães has been able to build a $R23 billion business from payroll loans. That is a major accomplishment by anyone’s standards.
Consignment credit is popular in Brazil because most banks will not loan money unless the loans are secured, and the current interest rates for secured loans are outrageous. Most Brazilians don’t have enough assets to guarantee a loan for a car or some other big-ticket purchase. Payroll loans give Brazilians the opportunity to borrow money at a lower interest rate using a preset payback period, and the guarantee that the loan is backed by their monthly income. It’s a win-win, according to Guimarães. More than 60 banks are competing in the consignment credit industry, and BMG Bank is considered one of the best banks in that industry by consumers.

Guimarães believes that the consignment credit business will continue to grow because the unemployment rate in Brazil is still under four percent. But, Guimarães also thinks other banks will not put as much emphasis on their consignment credit departments like he has. For the last 80 years, the family owned BMG Bank has always found a way to produce profits even when Brazil goes through the up and down economic cycle that is a part of the Brazil’s history.
Brazil’s population is growing. There are more than 180 million people living in Brazil, and 40 million of them are now considered middle class by the government. For the last seven years, those people have been buying cars, houses and other products are at an incredible rate. Guimarães thinks BMG Bank will be the bank that a large number of those people will turn to when they are ready to buy a car or some other major purchase. BMG Bank is also known for making used and new car loans, and that business along with payroll loans is making BMG Bank a major force in the Brazilian banking industry.