#150: The advances and challenges of the e-Consignado and why we should think of it as a public digital infrastructure
W FINTECHS NEWSLETTER #150
👀 Portuguese Version 👉 here
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For many years, payroll loans were seen as the key advantage of personal credit in Brazil. Direct paycheck deductions made the risk of default almost negligible in a country where, as of October 2024, around 73.1 million people had a negative credit record, according to Serasa 1. This allowed for lower interest rates and higher loan volumes. For banks, it was a guaranteed return; for borrowers, it was a quick way to access funds at more affordable rates. But this model was never fully extended to the private sector. Formal workers under the CLT regime remained on the sidelines, distant from a system designed mainly for retirees, pensioners, and public servants.
In 2025, this logic began to shift with the creation of the e-Consignado CLT. The publication of Ordinance No. 434 marked the beginning of an attempt to digitize and scale payroll loans for the private sector. For the first time, fintechs and banks were allowed to offer payroll loans directly through their apps, without relying on agreements with employers. This change opened the door to new infrastructures and sparked competition among players with different strategies and structures. Jeitto, for instance, acquired Pilla; white-label platforms gained traction, and investment funds began financing this new cycle through FIDCs (credit rights investment funds) backed by workers' salaries. Credit moved beyond the public sector payroll and became a new gateway for fintechs into the mass market.
This rapid expansion, however, came at a cost. The technical rush to launch the model exposed key weaknesses in public infrastructure and led to instability in authorization, validation, and transfer processes. Data from the Central Bank show a wide range of interest rates being applied under the new model, from 1.16% to 7.31% per month 23. Nearly half of the contracts already have rates above 4% per month. The worker may pay on time, yet still face default if the employer fails to execute the deduction properly.
Understanding the e-Consignado CLT is a way to grasp not only the benefits and opportunities it introduced, but also the technical and structural challenges that come with this new model. In this edition, I want to show how payroll loans can be more than just a credit product and evolve into a form of public digital infrastructure, just like Pix and Open Finance, provided it is developed with transparency and a stronger focus on creating win-win dynamics among government, businesses and workers.
How did payroll loans get to this point?
Payroll loans in Brazil were born as a pragmatic response to the challenge of expanding access to credit with low risk. Their regulatory framework was established in 2003 through Law No. 10.820, which authorized the deduction of loan installments directly from the paychecks of public servants, retirees, and pensioners. The predictability of payment reduced risk for lenders and, as a result, allowed for lower interest rates for borrowers. The model quickly gained traction and, within a few years, became one of the country’s main credit modalities, especially among INSS beneficiaries.
For two decades, the payroll loan system was based on formal agreements. Banks and financial institutions signed contracts with public entities to offer high-volume loans with competitive rates and minimal default. This arrangement shaped a specialized infrastructure chain made up of integrators, payroll systems, and operators working with a segmented and well-defined base. The main target audience was public servants and retirees, while private sector workers remained on the sidelines, with limited access to this type of credit.
Attempts to expand into the private sector faced structural barriers. The need to establish agreements with each individual company, the diversity of payroll systems, and the lack of a national infrastructure to enable automatic installment deductions made it difficult to scale the model for formal workers. Although some large companies maintained their own agreements, private payroll lending remained a marginal segment, with low penetration, limited competitive dynamics, and minimal fintech presence.
For example, when Direct Credit Companies (SCDs) were introduced in 2018 with the promise of promoting more digital credit without banking intermediation, the expectation was that new distribution models could break this barrier. However, the penetration of private payroll loans remained marginal. In 2023, according to data from the Central Bank, payroll loans for private sector workers accounted for only 4.8% of the total payroll loan portfolio, while loans for INSS beneficiaries made up more than 70%. Even with the rise of fintechs, the absence of a public layer that unified payroll data and enabled digital authorizations prevented the model from achieving real scale.
