The global digital economy in the third sector
There are immediate transformations in humankind's economic and social political relations whose enigma of how its total morphology will be challenges the intelligence to decipher it in order to respond to the most glaring emergency demands: saving lives, maintaining production and services and preserving the planet environmentally for us and for future generations of humanity.

Nothing will ever be the same! Nothing!

Humanity's political, economic and social transformations, which were already developing at an accelerated pace before the pandemic; will increasingly transport multiple human relationships to the dimension of accelerated digitalization.

The old mechanical-analog-national world is already in decline and in full transition to a digital-global world and the financial system – mainly the banks – is, without a shadow of a doubt, one of the leaders of this transformation, which will be radicalized as it advance Artificial Intelligence – this fantastic creation of... Human Intelligence.

There is a lot of debate about what a social development bank is and what the role of such an institution should be in this new reality. Many confuse what is an investment bank and what is a development bank.

Investment banks are institutions specialized in offering INVESTMENT solutions, such as stock funds, fixed income, pension funds, loans for working capital, fixed capital, among others.

DEVELOPMENT banks, on the other hand, are those whose objective is to finance at lower interest rates than those charged by commercial banks, thus promoting the economic and social development of productive sectors of society.

VIVA BANK is exactly the harmonic synthesis of these two functional universes of the financial world. It is a social development bank, operating in the fintech system, the first in its modality to qualify in Brazil and Latin America as an OSCIP (Civil Social Organization of Public Interest) for sustainable development credit, headquartered in São Paulo / SP, working with the same rules as national and international funding agencies, using resources from private investment funds and, in some cases, sovereign international funds.

This harmonious synthesis allows it to contribute in an effective and balanced way to the entire process of qualifying and quantifying the investment financed along with duly qualified projects for the third sector. Therefore, we follow the same guidelines adopted by international funding agencies, which are:

1º - The performance of development banks in scenarios of scarcity or restriction of resources in the market.

Given the historical fiscal restrictions to which governments are subject, especially in times of crisis, it is essential that development institutions strengthen their positions in fundraising, through other sources, such as the capital market and institutional investors, whether local or internationally.

In the specific case of Brazil, we see as necessary, and now essential, the encouragement of greater participation by the private sector (agile and effective) in financing projects of public interest. Such private participation in financing such projects becomes a structural necessity, since the contributions of public banks are not being sufficient to meet the demands of the country.
2º - Special support for micro, small and medium-sized companies

The pandemic crisis caused the death of millions of companies across the planet, regardless of their size and revealed, more than ever in history, the need for increasing investment in the development of micro, small and medium-sized companies - one of the strategic pillars action for all development banks. The support to these companies, which, in general, find it difficult to acquire credit, boosts economic activity, market development, entrepreneurship, innovation, job and income generation and, finally, raising public revenues due to the revival of economic activity.

VIVA BANK brought greater agility to operations, with a digital online financing platform, rapidly approaching small and medium-sized companies and expanding access to credit in an agile, dynamic and innovative way - a fact that makes it worthy of being the operator of the call "Social economy of result", which aims to promote the granting of digital credit in a structured way.

To do so, it was necessary to structure some aspects, namely:

– Mobility: The digital economy increases mobility on many different dimensions. For example, intangible property is one of its main features – the associated rights are easily transferable to low-tax jurisdictions. Users and customers can also trade across borders, which challenges traditional tax systems.

– Data as a source of value: fundamental characteristic of the digital economy. Data is collected from various agents and market activities. The growing capabilities to collect, store and handle massive data flows have led to the concept of "big data", which can generate value in private (marketing) or public (government) activities.

– Network effects: Network effects are pervasive in the digital economy. They have enabled the creation of value from private information, especially through so-called multilateral business models. In these models, multiple groups of people interact through a platform, resulting in positive and negative aspects. As an example of positive aspects, payment platforms, media and social networks are mentioned. As an example of negative aspects, one can mention compulsory advertising, which is considered intrusive and unattractive, but which is compensated by offering a low cost or even free service.

Such characteristics have relevant repercussions in the tax sphere, since traditional taxation structures are based on the intermediation of transactions, the territoriality of activities and the tangibility of goods. On the other hand, the digital economy, in general, but mainly for the third sector economy, has been causing changes in the socioeconomic paradigm, such as direct access to transactions, territorial neutrality of activities and dematerialization of goods.

The impact of each of these changes in the tax field is analyzed, using, as a didactic-methodological instrument, examples of new economic realities arising from the digitization of the economy in relation to the taxation instruments available in the Constitutional Tax System.
3º - Adoption of performance indicators more aligned with the objectives of development banks.

Regarding the performance metrics traditionally adopted by traditional financing institutions, such as the volume of disbursements or the size of the credit portfolio, we recognize that they are ways of measuring performance, but they relativize their importance, as they do not indicate what, in fact, development banks should measure their "ability to support the most vulnerable and improve their conditions".

Since the beginning of its operations, VIVA BANK has been operating with resources from funds and private investment groups, and as it is a social bank focused on sustainable development, all projects presented need to be framed in the following tripod: job and income generation, viability economic-financial and environmental sustainability, always taking into account the impact of VIVA BANK actions on the reality addressed.

Therefore, all operations carried out are structured on a case-by-case basis. If any project in question is not approved, an internal evaluation audit is carried out and, depending on the situation; the requesting company will be invited to resubmit the project, duly adjusted to meet the compliance required by the credit committee, with a new opportunity for the same to the request for financing.

4º - Investments in Education projects as a vector of economic development

Even though each institution has specific directions, according to the particularities of the region in which it operates, the understanding that Education is an essential driver in the path of development is increasingly clear. VIVA BANK has developed strategic partnerships with renowned research institutes and universities and technology centers that offer small and medium-sized companies the opportunity to acquire skills and knowledge for business development, in order to consolidate a corporate culture in the country and promote greater professionalization of these entrepreneurs.

5º - Structuring and modeling of projects suitable for projects

The structuring of projects is gaining more and more a strategic role in development institutions. There are two perspectives that need to be taken into account when requesting investment projects: on the one hand, the objective of generating positive impacts for society; on the other, the need to mitigate risks for investors.

What we see currently facing as a big challenge is in the projects we receive on our platform. We believe that this is perhaps one of the biggest problems facing social development banks. The biggest difficulty is precisely in "preparing them for financing with our funds, in order to mitigate the risks". Due to the unpredictability and payback time of these projects, the risks are often significantly greater than those seen for other types of investments. As an example, we can mention: an implementation company requests a financing project in the amount of 10 million reais, which includes civil construction, machinery and equipment and working capital. The project is visually well presented. However, the company has in its articles of incorporation the value of only 100 thousand reais. Or many companies request project values where their ability to pay x debt is already compromised.
This is one of the main obstacles to a greater participation of the private sector in financing long-term projects. In other words, the effective release of a loan encounters both macroeconomic (recession, inflation, high taxation, high interest, etc.) and microeconomic (business-financial-accounting day-to-day business) obstacles.

Companies that are going to request some type of financing from a development bank, whether public or private, need to be aware that they are requesting financing and that the resources are financed and not donated, as the so-called lost fund resources.

In parallel with the concern with financial viability, it is essential that the supported projects generate positive externalities for the entire society, bringing tangible improvements to the region where it is being implemented, both in terms of economic growth and in terms of the sustainability of social inclusion and environmental.

VIVA BANK has a portfolio of projects in various segments, such as infrastructure services, basic industries, agribusiness, sustainable mining, health, clean energy, education, civil construction and projects of various types of technologies, among others, prioritizing mitigation of risks in all operations, with an attractive profitability in this market. Our products and services have unique and specific characteristics, with more competitive rates, agile services, and little bureaucracy.

The essence of development banks cannot be lost sight of. Projects linked to fundamental areas such as health, sanitation, education and transport have the capacity to produce positive impacts for the population in the areas covered by these projects, provided they are strategically elaborated and anchored in reality.

Even developed economies need institutions that act to meet demands not adequately met by commercial banks, the so-called market failures.

VIVA BANK has been working more and more towards important investments in Brazil that lead us to build a new economy with social inclusion and unequivocal sustainable development.

There are many challenges for Brazilian society, which also include the preservation of the environment. This concept has been among the most debated for a long time at the United Nations and in any part of the world, including Brazil.

In addition to the issue of sustainable development, we must focus on sustainable human development, which can never be dissociated. Economic sustainability, social sustainability and environmental sustainability must coexist, objectives that have been relentlessly focused on by our team at Viva Bank, which is a private development bank, which complies with the law on Civil Society Organizations of Public Interest (OSCIP's), subject to the strictest operating rules in the market.

The international investment funds that we are bringing to Brazil are aware of the importance of this partnership with us, in extremely competitive terms. Our work ahead of VIVA BANK is guided by these same principles and moral values. We have a technical team of important institutional articulation, and highly qualified professionals in the most diverse sectors, contributing over the last few years to the construction of programs and projects of national strategic interest in many regions and states of Brazil.

In a productive partnership with the private and sovereign funds of this great regional articulation – with a global impact -, VIVA BANK wants to become the Digital Financing Gateway for national and regional Sustainability and to be a financial operator that contributes to all who want to promote a vigorous and necessary ecological reconversion of the economy, in the areas of investment, financing, production, marketing, distribution, transport and consumption.

We are convinced that we will come out of this moment stronger and with new partnerships, putting ourselves at everyone's disposal to contribute to the respective purposes with our structure to face the challenges that have deepened even more in these times of pandemic, with the firm intention of acting jointly for the presentation of urgent solutions.

The world is moving towards the global digitization of the entire social fabric, this is a fact, but this digital world will be increasingly human if we place all its fantastic scientific-technological achievements in favor of peace, multilateral cooperation and the well-being of people. peoples within a world that we want peaceful, fraternal, solidary, developed and coexisting happily and harmoniously with nature preserved and refreshed.

And VIVA BANK is modestly available for us to follow and build, together, these noble ideals.
Sandro Soares
President - Viva Bank
São Paulo, 08/07/2021