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In a bid to tackle one of the biggest hurdles facing Brazil’s small restaurant owners, Frubana, a business-to-business online marketplace, has partnered with global nonprofit Accion and the Mastercard Center for Inclusive Growth to provide embedded financing solutions. The initiative aims to extend credit access to over 200,000 micro and small enterprises (MSEs), offering them working capital support and strengthening their financial resilience.

Access to credit remains a significant challenge for local restaurant owners and the suppliers that keep them running. Small-scale agriculture accounts for 77% of Brazil’s agricultural output, feeding a network of more than 2.5 million small restaurants and food establishments. Yet, traditional procurement methods and the informal nature of many food businesses result in a lack of financial records, leaving many restaurateurs locked out of formal credit markets and burdened by high costs.

Frubana connects small restaurant owners with smallholder farmers, food processors, and manufacturers, offering them access to supplies, software, and responsible credit. The marketplace streamlines transactions, reduces operational costs, and supports businesses that struggle to build the robust credit histories required by conventional banks.

To bridge this financing gap, Accion and Frubana have developed an embedded credit system that incorporates alternative data sources into credit decision-making. By moving small business owners away from expensive, cash-based supply chains, the initiative aims to offer them more affordable access to essential resources.

“Small restaurants in the food industry in Brazil are largely invisible to the financial system,” said Juan Pablo Garcia, Head of Frupay, Frubana’s financial arm. “Small-scale restaurateurs are often unable to access credit to meet their working capital requirements as the lenders often perceive them as high-risk customers due to irregular cash flow and insufficient formal financial records. Through this collaboration, we seek to innovate our credit appraisal mechanisms and develop better payment and credit solutions for these small business owners to help them access crucial credit that can push their business growth.”

The partnership leverages machine learning tools to assess creditworthiness using alternative data. This new model has already led to the issuance of 80,000 loans, with Frubana approving eight out of ten credit applications. Notably, a third of the approved loans have been disbursed to businesses that are either new to credit or newly established. Loan performance has also exceeded expectations, with delinquency rates remaining lower than projected.

“In Brazil, local restaurants and food-producing businesses, particularly those owned by women, have long been prevented from accessing credit due to high costs and complicated credit application processes,” said Jonathan Blanco, Senior Director, Digital Lending at Accion Advisory. “We see huge potential to serve these segments by leveraging digital platforms and the data that flows through them to create a better financial picture of these businesses. Through this partnership, we are moving beyond conventional scoring mechanisms and using alternative data to establish creditworthiness of small business owners and developing tailored and affordable financial products that can help them run and grow their business.”

The initiative builds on Accion’s eight-year partnership with the Mastercard Center for Inclusive Growth, which supports the transformation of financial service providers, digital platforms, and fintech firms. The long-standing collaboration has already helped expand financial inclusion efforts across 25 countries, aiming to benefit 23 million people worldwide.

“Small business is actually the biggest business in the world, making up 90% of businesses globally,” said Luz Gomez, Vice President for Latin America and the Caribbean at Mastercard Center for Inclusive Growth. “Through this effort, we look forward to expanding responsible financial services to millions of new micro and small enterprises in Brazil and drive their inclusion in the financial ecosystem.”

With digital finance reshaping access to credit, the collaboration between Frubana, Accion, and Mastercard represents a significant step toward bridging the financial gap for Brazil’s small restaurateurs. By using technology and alternative data, the initiative aims to offer a more inclusive financial system—one that allows small businesses to not just survive, but thrive.