Jan 17, 2018

 Institutions will develop joint actions in areas such as qualification and new distribution channels

The year begins with good news for micro and small Brazilian companies. SEBRAE and the Brazilian Development Bank (BNDES) promote cooperation agreements with actions of access to financing operations, credit guarantee and business orientation, which aims to benefit up to 280,000 small-sized enterprises. 

The goal is to increase the access of small business entrepreneurs to BNDES funds. The agreement was signed by the President of SEBRAE, Guilherme Afif Domingos, and by the Managing Director of BNDES, Ricardo Luiz de Souza Ramos, on Wednesday, 17th, at the headquarters of the SEBRAE – National, in Brasilia. 

“Credit is the fuel for micro and small companies and our battle is to debureaucratize the access and achieve better interest rates for them,” emphasizes the President of SEBRAE, Guilherme Afif Domingos. One of the main actions of this agreement is to facilitate partnerships with fintechs to accelerate the granting of loans with BNDES funds. 

Credit granting from public and private financial institutions for small-sized enterprises has been decreasing in the last four years. According to data from the Brazilian Central Bank, from 2014 to 2017, there was a reduction of 33% for micro and 29% for small companies.

With the validity of the Long-Term Interest Rate (LTIR), BNDES’ directors approved changing the Operational Policies that guide the Bank’s financing. One of the most important changes concerns the adoption of the classification criteria of small businesses to adapt to the General Law for Micro and Small Businesses – that is, maximum revenue limit of up to R$ 360,000 a year for micro and of up to R$ 4.8 million for small companies. The Crescer sem Medo Law (Growing Without Fear – LC no. 155/2016), amending the LC 123/2006 also changed the increase of the ceiling of the MEI from R$ 60,000 to R$ 81,000 a year. The trend is that these new parameters generate a positive effect on the volume of credit offered by the banking system, which operates the credit lines made available by BNDES. 

BNDES has been developing actions to simplify, accelerate and expand the access to credit of micro and small companies. Among the several initiatives developed we highlight the launching of the MSME Developer channel in June 2017. Through the Channel, 25,000  financing requests have already been made, with multiplier effect of more than 54,000 proposals forwarded to intermediating financial institutions. Most of the public that access the tool (95%) is composed of micro and small entrepreneurs, mainly in the sector of trade and services.

“In the next few years we will have more than 50% of loans for MSMEs and the Developer Channel is what makes me believe it,” says Ricardo Luiz de Souza Ramos, Managing Director of BNDES. “This tool gives more power to the entrepreneur in negotiating better financing conditions to develop his/her business. In addition, it responds to the need for modernization of the BNDES business model in the assistance to MSEs, with greater speed, simplicity, proximity and transparency,” he says. Until now, more than 250 operations were originated in the Channel and represented R$ 100 million in new business with MSEs.

SEBRAE Survey – In 2016, 83% of small businesses did not seek banking loans, a number almost 10% higher than in 2015. These data appear in a SEBRAE survey with 6,886 entrepreneurs across the country. For 47% of the entrepreneurs, the reduction in interest rates would be the best solution to facilitate the acquisition of financing. The reduction in bureaucracy is pointed out as a suggestion for 27% of the respondents.

“The cost of money, bureaucracy and the excessive requirement of guarantees by banks make entrepreneurs seek other sources to finance their business,” says the President of SEBRAE, Guilherme Afif Domingos. As an alternative to banks, most entrepreneurs negotiate payment with suppliers (52%), use postdated check (27%) or overdrafts (20%) and the corporate credit card (21%). However, even in these forms of financing there was a decrease in the percentage of use. Of the companies surveyed, 22% are not using any financing operations – ten percentage points higher than last year – and 15% maintain loans at banks.

Technical cooperation – The work plan of the cooperation agreement focuses on four main areas that must be executed within two years. The areas about granting of targeted credit and guarantees and collateral are what cover the largest number of actions: orientation and qualification for access to credit; granting of credit to MSE; workshops, courses and seminars; and guarantors of credit systems. The second area, distribution credit channels and financing, brings the challenge of using fintechs to improve the access to credit for these entrepreneurs. The capitalization of micro and small companies and the institutional relationships constitute the last two area. With this, it is expected that the financing with MSEs will reach R$ 6 billion over the next two years. 

In 2017, the consolidated data from SEBRAE to some of these actions were:

• Number of small businesses assisted in orientation and qualification for access to credit: 51,743 companies 
• Number of BNDES credit seminars carried out: 144, with 7,400 participants
• 144,000small businesses guaranteed by Fampe, which have accessed more than R$ 3.6 billion in financing operations with associated banks.