Productive microcredit is the type of credit aimed at financing low-income entrepreneurs. On average, loans amount to just over R $ 2,000 and are aimed at investing in working capital, according to a report in the Central Bank’s Financial Citizenship series. Altogether, the Brazilian microentrepreneurs who had loans to legal entities totaled R $ 9.3 billion in 2016. It seems like a lot of money, but that does not reach 1% of the entire National Financial System.
Another interesting information is that, according to a survey commissioned by Good Credit Brasil, for every R $ 1 borrowed via microcredit, another R $ 4.50 is added to the municipality’s GDP (Gross Domestic Product).
Where could we go as a nation if the credit would reach the public that needs it most easily?
The Brazilian reality and productive microcredit
Brazil is going through a hard reality, unemployment affects 13 million people and many of them end up undertaking to seek the income that was missing.
Many end up working informally and even without experience, they are able to move on, generating their own jobs. In addition to the natural difficulties that every entrepreneur faces, those at the base of the pyramid have an even greater challenge.
Access to credit is difficult, interest rates are high, reaching 4% per month; bureaucracy gets in the way and many go through embarrassing situations when they go to the bank. Meanwhile, a large industrialist in the pharmaceutical sector, for example, does not pay 1% interest per month.
The lack of incentives
Coupled with conditions of poverty, it reinforces the unfavorable conditions facing the poorest people. This inequality of opportunity may be linked to the increase in violence, drug trafficking, revolt, hunger and to trigger various social problems. This harms the country as a whole, the consumption capacity of families, the economy and people from all walks of life.
In this context, without the possibility of formal employment, many people start their own business. Productive microcredit, made possible by the Good Lender chain, presents itself as an alternative to access capital for investment in low-income businesses.
Loans are made collectively as in crowdfunding and interest is no more than 1% per month for entrepreneurs. You can invest in peripheral businesses, multiplying opportunities for those who need it most. Then he receives the money back with income.
Good Finance and Good Lender’s productive microcredit
Good Finance has been an entrepreneur for 3 years. He founded Quitanda Esperança, in Pirituba in the far west of São Paulo. Good Finance came from Bahia to São Paulo in the 1980s. He worked for many years in commerce, until he became unemployed and decided to open his own business. Despite having a consolidated business, he faces difficulties in obtaining financing and makes his working capital with a loan shark.
This is not cheap, on the contrary: the moneylender charges an average of 1% interest per day. Absurd. “In short, I work for him. I don’t get tired of the knowledge I have. I have goals and that’s why I have to hope. ”, Reported the entrepreneur firmly.
Good Finance is looking for investment collectively through the Good Lender network. He needs R $ 3,000 and in this modality, he will be able to pay in 10x and without interest. With the opportunity generated with Good Lender, Good Finance will be able to invest in working capital, giving more impetus to his cash flow. In the future, he wants to bring grocery products to the grocery store as cleaning and personal hygiene products. “In addition to making these products available to customers, I will also be able to use and save on this.”