Brazilian Small and Medium Enterprises Need Better Business Environment and Greater Access to Credit

As a fundamental part of the Brazilian economic recovery, micro and small companies are at the center of the agenda of the current Brazilian government, which has been announcing the first measures to stimulate improvements in the business conditions of the sector and preparing new steps in that direction. "We are inoculating the good virus of modernity and red tape in this area," said the special secretary of Productivity, Employment and Competitiveness of Ministry of Economy, Carlos Da Costa, in the opening of the seminar "Productive SME's: funding for development and growth", held in Brasilia by CAF -Development Bank of Latin America-, in celebration of its 50th Anniversary.

One of the next measures to be announced, says Da Costa, will be the National Credit Guarantee System, in partnership with CAF, to streamline the current structure of access to credit for small and medium entrepreneurs in the country. In the making, there are also "Certisimples", a platform that will consolidate information about the technical capabilities of entrepreneurs interested in credit, which will complement financial data to further facilitate access to loans. Finally, is already testing a virtual environment aimed at bringing banks and potential customers closer. "It's going to be like a credit Tinder, for helping entrepreneurs and banks get to know each other and do business," said the special secretary, referring to the people-to-people application. Da Costa also drew attention to the current challenge of creating conditions for entrepreneurs to start investing in intangible goods, such as services, rather than just machines and equipment.

For CAF Private Sector Vice President Jorge Arbache, it is necessary to create mechanisms to increase the productivity of small and medium enterprises so that they are not just, as many today are, refuges of people who lost their jobs and were forced to become an entrepreneur. "It is also essential to reduce the current bureaucracy, which makes work difficult in all areas". For him, if there is no improvement in the capacities of small and medium enterprises in Brazil, it will not be possible to resume growth and bring down the current level of unemployment. Between January and August 2019, 90% of the jobs created came from micro and small enterprises.

The president of Brazilian Micro and Small Business Support Service (Sebrae), Carlos Melles, recalled that for over 40 years he has been working to promote the productivity of economic sectors and that he now sees more federal government, private and private development banks, and other entities linked to the productive sector, fully aligned with the purpose of promoting small and medium enterprises. "Sebrae is ready to implement public policies in gestation and ongoing".

The first panel, entitled “In search of lost time: SMEs as a driver of productivity growth and innovation”, debated the main challenges facing Brazilian entrepreneurs today , such as difficulties relating to the business environment (entry barrier, bureaucracy, poor access to viable credit, informality), lack of management skills and job creation and, finally, unpreparedness for internationalization.

In the second and final panel, “New Technologies and Financial Products to Support SMEs,” topics such as Innovation and Financial Product Creation for Small and Medium Enterprises were discussed, the uses of technologies to facilitate the path of entrepreneurs in their quest for increased productivity and new forms of business guarantees.