Antonio José de Souza, 52, owner of a small mobile phone shop in the Complexo do Alemão, one of the most violent favelas in all of Brazil until recently, needed money to increase his range of products. When at the end of 2011, the agent of the Caixa Econômica Federal knocked on the door of his shop, the trader, without thinking twice, requested a loan of 2.300 euros: three days later the money was already in his account.
Antonio is only one of the 97 people from the favela who in the last four months of 2011 benefited from the microcredit program facilitated by the Caixa, a state bank linked to the Ministry of Economy. The strategy of the financial institution is to send young people, aged between 18 and 22, with low incomes, but in possession of at least a high school diploma, to the area to meet the merchants directly and offer them the best solution: "They are all inhabitants of the community. They know the entrepreneurs and recognize their needs,” explains Bruno Fraga, supervisor of the Caixa, to the Folha de S. Paulo newspaper. The money is usually then used for small renovations or to increase the range of products on sale.
Banco do Brasil, another institution with majority state participation, instead adopts a less aggressive strategy: the agents do not knock on shopkeepers' doors, but meet the public in the branches that were opened in 2011 in three Rio favelas, the Complexo do Alemão , the Rocinha and the Cidade de Deus. Three names that for decades have instilled fear in the Carioca population and that instead, lately, with the expulsion and arrest of the narcos and with the entry of the UPPs, the Polícia Pacificadora Units have been pacified and secured. The result is that, in just three months, 330 small loans were disbursed for a total of around 400 thousand euros.
However 22% of the population of the entire state resides in the favelas of Rio, around 3 million people, a potentially huge customer base. In fact, contrary to what one might think, the economy within the favelas throughout Brazil is extraordinarily active and despite the poverty, these communities represent a vast market of consumers, small entrepreneurs and traders.
The two financial institutions that first launched into the business offer very similar credit access conditions: loans do not go beyond 6.400 euros for companies that invoice up to 51 euros a year. At the subsidized rate of 0,64% per month, the debt can be paid off in 24 months.
And for 2012 banking institutes expect a real boom in requests and disbursements, the forecast is to see an increase of 300%. Currently, microcredit for commercial activities and businesses represents 20% of the pie, while the remaining 80% is credit for consumption. According to analysts, this trend will reverse already in 2013: "We have many operations under analysis that are about to be approved" confirms Tarcisio Hubner, superintendent of Banco do Brasil.
The next step will also be to open new agencies in all of Rio's 18 favelas where the Policia Pacificadora is already installed and where, in addition to peace, there is now a great desire for development and well-being.
