Brazil Development Bank Increases Support to Micro, Small and Medium-Sized Businesses

RIO DE JANEIRO, BRAZIL – The Effectiveness Overview, submitted yesterday, November 11th, by the National Bank for Economic and Social Development (BNDES) shows that, in 2018, 45 percent of approved project submissions were for micro, small and medium-size companies (MSMEs) and 55 percent for large-sized projects.

In 2015, the percentage of investments in MSMEs was only 27 percent.

The bank’s repositioning mainly involves the digitalization of products. “Currently it is faster to grant credit to micro and small-scale companies,” said the head of the Department of Business Intelligence and Effectiveness of BNDES’ Planning Area, Victor Pina.

According to the report, in the 2017/18 two-year period, the bank succeeded in stabilizing its investment rate at approximately R$70 billion (US$17.5 billion), which represents a disbursement of about one percent of Brazil’s Gross Domestic Product (GDP): 1.08 percent in 2017 and 1.02 percent, in 2018.

These figures were still a long way from those achieved in 2013/14, when the bank invested R$190.4 billion and R$187.8 billion, respectively.

Infrastructure was the segment with the highest investment (38 percent in 2017 and 44 percent in 2018).

Industry received 21 percent of investments in 2017, but lost 3 percentage points in the following year, standing at 18 percent. Agriculture and ranching saw investments grow slightly from 20 percent in 2017 to 21 percent in 2018.

The report shows that the projects financed by the bank generated, or maintained, some 2.27 million jobs (1.15 million in 1027 and 1.12 million in 2018).

In addition to MSMEs, the bank’s report shows the impact of financing in the areas of sanitation, electricity, and transport.

Victor Pina highlighted the BNDES’ role in the energy sector, with an increase of 11,099 megawatts in energy generation capacity, which represented an increase of 75 percent. He emphasized hydroelectric and wind energy and the extension of 7,700 kilometers in the power supply network.

“These are two extremely important segments,” he added.

In terms of sanitation, there were 17 investment projects in the two-year period, representing the supply of water to 320,000 people and 943,000 with new sewage connections.

This is the bank’s third report. The first was for the period between 2007 and 2014 and the second, for the 2016/2017 two-year period.

Source: Agência Brasil