Between August 2004 and August 2010, Brazil’s National Productive Microcredit Programme, which was developed in an effort to expand access to credit among formal- and informal-sector entrepreneurs, generated the equivalent of approximately USD 4 billion dollars in credit for low-income households [1]. Lauro González, coordinator of the Microfinance Studies Centre of Brazil’s Getulio Vargas Foundation was recently quoted as stating, “the number of holders of small-scale loans rose from 200,000 to more than one million” since the launch of the programme in 2003 [1]. Marcelo Azevedo Teixeira, manager of the Urban Microfinance Unit at the state-run Banco do Nordeste do Brasil (BNB), stated, “The initiative has played an important role in strengthening and expanding credit for the low-income population…. New actors entered the market, new products were developed, and regulations evolved, which made it possible to coordinate the activities of different institutions” [1].
Mr Gonzalez continued, “Despite the strong economic growth of the Brazilian economy in the last few years, only 10 percent of small-scale entrepreneurs who need credit now have access to it…. That means there are a potential eight million clients to be explored, equivalent to 85 percent of the market…. We still have a long way to go” [1]. Gonzalez proposes improvements such as “more innovative” mechanisms, more group loans, different ways for lenders to assess credit risk and the strengthening of banks like the BNB [1].
By: Alexandra Pattee, Research Associate
About Getulio Vargas Foundation: Getulio Vargas Foundation (FGV in Portuguese), a Brazil-based foundation focused on higher education, created the Microfinance Studies Centre in June 2007 in an effort to contribute to the expansion of microfinance activities in Brazil. The mission of the centre is to encourage “reflections, analyses, understanding, and the creation of strategies and proposals for institutional change in the sector”. FGV’s Microfinance Studies Centre conducts research projects, holds events and offers courses in the areas of finance, microcredit and microinsurance. Financial information on the organization is not available.
About Banco do Nordeste do Brasil (BNB): Banco do Nordeste do Brasil (BNB) is a Brazilian public bank. Founded in 1954, BNB operates as a development, investment and commercial bank serving Brazil’s northeastern region. BNB is the government’s primary financing agent in the region, allocating funds to finance individuals and small and medium-sized enterprises as well as to fund social and financial programs. As of December 31, 2009, the bank served 11 states through a network of 183 branches and a staff of 5,895. BNB offers microfinance services through a subsidiary microfinance institution (MFI), CrediAmigo, which was founded in 1998. As of 2009, CrediAmigo reported a gross loan portfolio of USD 302 million and 528,000 active borrowers.
Sources and Resources:
[1] Inter Press Service News Agency, “Brazil, Major Microlaboratory Against Poverty”, http://ipsnews.net/news.asp?idnews=55863
MicroCapital’s Microfinance Universe: Getulio Vargas Foundation,
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Getulio+Vargas+Foundation
MicroCapital’s Microfinance Universe: Banco do Nordeste do Brasil (BNB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Banco+do+Nordeste+do+Brasil+%28BNB%29
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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