Projeto Comunidade (Community Project), which was launched by Brazilian cosmetics firm Natura Cosmeticos SA (Natura) in February 2011, is reportedly helping to revive the local economy after illegal drug operations were significantly curtailed by joint police-military operations in Complexo do Alemão, a neighborhood in Rio de Janerio, Brazil. Projeto Comunidade offers non-cash credit to women interested in becoming representatives for Natura. This credit may be redeemed for Natura products that they then must sell within 21 days. As a result of a study conducted by Natura indicating that existing debt was preventing women from working with the cosmetics firm, the maximum debt allowed for new representatives was increased from BRL 200 (USD 125) to BRL 500 (USD 315). The project also allows women who have debts of more than BRL 500 to acquire the products needed to become representatives by paying cash upfront or by borrowing from Santander Microcredito, a for-profit microlending institution. Natura also provides the women financial management courses and training in sales techniques at no charge.
Referring to recent police and military actions against drug gangs that had previously held wide influence in the neighborhood, Luis Bueno, Natura’s regional director, explained, “We have been working in the Complexo do Alemão for three years, but the pacificação made it easier and safer for us to access the area and expand our work. It also provided us an opportunity to help the community at a time when they need it most, because after the drug gangs leave the local economy dips as the money spent by dealers on services dries up.”
By Nisha Koul, Research Associate
About Natura Cosmeticos SA: Natura Cosmeticos SA (Natura) is a Brazilian manufacturer and marketer of skin care, cosmetics, perfume and hair care products that was founded in 1969. In 1974 it adopted a direct sales model. In 2004 it became a public company listed on the São Paulo Stock Exchange. In 2008, it had 800,000 resellers working in Argentina, Brazil, Chile, Colombia, France, Mexico and Peru. As of 2010, it reported total assets of USD 2 billion, total revenue of USD 3.2 billion and net income of USD 471 million according to Bloomberg Businessweek, a US-based magazine. In 2011, it launched Projeto Comunidade (Community Project) in Complexo do Alemão, a neighborhood in Rio de Janerio, Brazil, that helps local women become resellers for the company by providing credit redeemable against Natura’s products. It also provides its resellers with financial management courses and training in sales techniques at no charge.
About Santander Microcredito: Santander Microcredito began as Real Microcredito in July 2002 operating as a for-profit microlending subsidiary of Banco Real ABN AMRO. In 2010, Santander Bank, a multinational institution based in Spain, acquired the operation from Banco Real. Santander Microcredito offers small loans to growing businesses that lack access to conventional forms of credit. As of 2009, it reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 52.1 million, a gross loan portfolio of USD 48.7 million, approximately 84,500 borrowers, return on assets (ROA) of 4.9 percent and return on equity (ROE) of 52.3 percent.
Sources and Additional Resources:
[1] Guardian, UK, http://www.guardian.co.uk/global-development/poverty-matters/2011/jun/27/brazil-favela-cosmetics-microfinance?INTCMP=SRCH
Bloomberg BusinessWeek, http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ticker=NATU3:BZ&dataset=incomeStatement&period=A¤cy=US%20Dollar
MicroCapital Universe Profile: Santander Microcredito, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Santander+Microcredito
MicroCapital Universe Profile: Natura Cosmeticos SA, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Natura#Natura_Cosmeticos_SA
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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