Rio Grande do Norte currently has more than 277,842 Individual Microentrepreneurs (MEIs), microenterprises and small businesses that can benefit from the Believe Program, launched this Monday 22nd by the Federal Government. Among the goals of the initiative are creating conditions to expand access to credit, renegotiate debts and guarantee more support for these three sectors of the economy.
“There is nothing more essential for a society, whatever it may be, to develop, if it is unable to have opportunities and if it does not have credit. We are creating the conditions so that, regardless of quantity, social origin, size of business, people have the right to access the financial system and take out credit”, stated the President of the Republic, Luiz Inácio Lula da Silva, during the program launch event, at Palácio do Planalto.
President Lula, ministers, authorities and potential users of the new credit options at the Crédito launch event at Palácio do Planalto. Photo: Ricardo Stuckert / PR
Across the country, there are more than 15.6 million MEIs, of which 186,791 are registered in Rio Grande do Norte. Of this universe, 101,680 are commanded by men (54.4%) and 85,111 (45.6%) by women.
The state also demonstrates potential in the microenterprise sector, with 78,776 units of this type of business among the more than 6.69 million registered in Brazil.
Finally, the small business sector in Rio Grande do Norte currently has 12,275 registrations among more than 1.21 million across the country that could expand access to credit through Crédito.
Axis of Believe
Crédito is based on four main axes. The first (Acredita no Primeiro Passo) is a microcredit program for those enrolled in CadÚnico. The second (Believe in your business) is aimed at companies, through the Desenrola Pequenos Negócios and Procred 360 program. There is also a front that aims to create a secondary market for real estate credit. Finally, there is the focus on Eco Invest Brasil – Exchange Protection for Green Investments (PTE), which aims to encourage foreign investments in sustainable projects in Brazil. “This program that was launched today is effectively the beginning of a promising future that this country is announcing to its people”, highlighted President Lula.
CADUNICIAN AND WOMEN – In Axis 1, the microcredit program for those registered in CadÚnico targets low-income families registered in the Cadastro Único; informal ones; women (since, currently, 84% of Bolsa Família families are headed by women); small rural producers who access the Food Acquisition Program (PAA); and support for the Rural Development program.
The microcredit program is a credit guarantee system, carried out through FGO-Desenrola, which will have a source of R$500 million in resources for investments in 2024. FGO-Desenrola is a guarantee instrument intended for financial institutions that operate with credit to settle debts of Desenrola Brasil Track 1 beneficiaries. An important guideline of the microcredit program is that at least half of the grants must be allocated to women.
The Single Registry currently has around 95 million people. Between January 2018 and June 2022, only one million families registered with CadÚnico had access to productive microcredit. During this period, 5.6 million operations were carried out, totaling R$32.5 billion in transactions, with an average value of R$5.74 thousand. The default rate among people on the annual CadÚnico is less than 1.7%.
FOCUS ON WOMEN – Women have more difficulty accessing credit in Brazil. Only 6% of entrepreneurs received help from financial institutions to open their businesses, and the majority, equivalent to 78%, started their business with their own resources, according to Sebrae. Of the total number of entrepreneurs, 54.9% combine household and business tasks, which is one of the factors they point out that affects their performance. More than 70% of entrepreneurs have debts, with 43% having late payments. The women who fall into this statistic are predominantly black, from classes D and E, with revenues of up to R$2,500 and who undertake business out of necessity.
UNLOCKS SMALL BUSINESSES – In Axis 2, one of the main actions is Desenrola Pequenos Negócios. Its target audience is MEIs, micro-enterprises and small companies with annual gross revenue of up to R$4.8 million and which are in default on bank debts.
According to Serasa Experian, around 6.3 million micro and small companies were in default in January 2024, the highest number in the series started in 2016. To try to reverse this situation, the Federal Government will authorize the renegotiated value until the end of 2024 of defaulted debts up to the day of publication of the MP can be counted for calculating banks’ presumed credit in the years 2025 to 2029. This means that banks will be able to increase their level of capital to grant loans.
This incentive does not generate any expenses for the Government in 2024. In the coming years, the estimated cost of tax waivers is very low, in the order of R$18 million in 2025, only R$3 million in 2026, and at no cost to the government in 2027.
PROCRED 360 – This is a policy to encourage credit for MEIs and micro-enterprises, with revenues of up to R$360 thousand per year. It is aimed precisely at this audience, which has more difficulty accessing credit. PROCRED 360 will have an interest rate of Selic + 5% per year, a rate lower than that of the National Support Program for Micro and Small Businesses (Pronampe). Companies that have the Mulher Emprega Mais Seal, and those that have majority shareholders or managing partners, will be able to take out larger loans, up to 50% of the previous year’s annual revenue. In 2023, more than 488 thousand operations were contracted through Pronampe. The volume traded in these operations was R$33.8 billion and of this total, only R$262 million was allocated to MEIs and another R$8.68 billion went to micro-enterprises.
PRONAMPE – Crédito also foresees a modernization of the National Support Program for Micro and Small Businesses, in order to allow debt renegotiation and the creation of better conditions for women entrepreneurs. As a result of this measure, those who are in default on Pronampe debts will be able to renegotiate them with the banks, even after the guarantees have been honored, allowing these businesspeople to return to the credit market. An expanded limit will be created, of 50% of annual gross revenue, for companies that have women as majority shareholders or managing partners.
SEBRAE – Within the Believe in your Business axis, Sebrae will expand credit lines within the scope of the Guarantee Fund for Micro and Small Businesses (FAMPE). Over the next 3 years, FAMPE intends to provide over R＄30 billion in credit. To this end, Sebrae capitalized the fund, which reached a net worth of R＄2 billion to be leveraged for new operations. The strategy is to increase the number of operating institutions, including the four federal public banks, the main cooperative systems, regional development agencies and banks and, through BNDES, private banks. The interest rates charged by the financial institutions that operate FAMPE in current agreements vary according to the credit policy of the financial institution, the region and the size of the client.
REAL ESTATE – Brazil has a low supply of real estate credit, equivalent to 10% of the Gross Domestic Product (GDP). In middle-income countries, supply is between 26% and 30% of GDP. In other words, the civil construction sector in the country operated below its possibilities.
In this way, with the real estate market and civil construction sector as its target audience, Clique will create a more robust secondary real estate credit market to enhance this sector in Brazil. This action especially benefits middle-class families, who do not qualify for affordable housing programs, but for whom financing at market rates is too expensive.
The initiative aims to stimulate the construction sector and promote the generation of jobs, income and economic growth, in order to positively impact the Brazilian real estate market. The role of the Asset Management Company (Emgea) to act as a securitizer in the real estate market will be expanded with the creation of the secondary market for real estate credit. This will allow banks to increase the granting of real estate credit at affordable rates for the middle class, making up for the drop in savings capture. By allowing securitization, banks open up space on their balance sheets to release new real estate financing.
ECO INVEST – In the current scenario, given the volatility of the real, the cost of exchange rate protection for longer terms is so high that it makes ecological investments in foreign currency unfeasible. As a result, there are practically no solutions on the national market for terms over 10 years. To fill this gap, the Federal Government proposes Exchange Protection for Green Investments (PTE).
The initiative aims to encourage foreign investment in sustainable projects in the country and offer exchange rate protection solutions. In this way, the risks associated with exchange rate volatility can be mitigated and do not hinder businesses that are crucial to the Brazilian Ecological Transformation.
Targeting foreign investors, sustainable project companies, the financial market and government entities involved in sustainability, Eco Invest Brasil has as partners the IDB and the Central Bank.
Through this initiative, the Federal Government seeks to guarantee long-term protection in foreign currency in the country. The program does not intend to interfere in the foreign exchange market and will work to leverage the resources already available in the country. Lines of credit will be provided at a competitive cost to partially finance investment projects aligned with ecological transformation that use foreign resources.
For the foreign market, Eco Invest Brasil’s actions will help the country stand out as a leader in promoting the global green agenda and will allow it to offer safer direct foreign investment, which will expand the financial integration of Brazilian companies with the global market. The objective is for Brazil to become even more attractive to foreign investors seeking to align themselves with green and sustainable projects.
Tags: benefit thousand small businesses
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