Since the federal government announced on July 5 the second round of the National Support Program for Micro and Small Businesses (Pronampe), the credit rush has intensified. Until last Tuesday (20), nearly half of the resources reserved for the initiative had already been committed. This means that, of the total budget to be released – 25 billion reais – a little more than 11.3 billion reais had already been granted to small businesses and micro-entrepreneurs, in around 150 operations carried out by the banks.
Wanted by the report, the Economy Ministry did not say whether it was considering a larger contribution to the program. Meanwhile, institutions such as Sebrae stress that to meet demand, a line of credit of around R $ 200 billion would be needed.
In the Brazilian scenario, micro and small enterprises represent 30% of gross domestic product (GDP) and 50% of total formal jobs. This area currently represents more than 90% of formal enterprises, and is also responsible for more than half of the wage bill.
“I often say, in a somewhat provocative way, that the Brazilian economy is made up of small businesses. When this sector works, this sector drives the economy forward,” said Giovanni Beviláqua, doctor of economics at the University of Brasilia ( UnB) and technical analyst. at the Capitalization and Financial Services Unit of Sebrae Nacional.
Despite its representativeness, the sector is generally viewed by financial institutions as “higher risk”, which, therefore, makes credit operations difficult. In this context, initiatives such as Pronampe bring to the urban sphere the performance of programs such as the National Program for the Strengthening of Agriculture (Pronaf). These are initiatives whose mechanism design is more “simple and efficient”, because the National Treasury provides resources in a guarantee fund and the latter, therefore, ensures credit operations.
“With the permanent program, this gives financial institutions greater predictability that there will be a guarantor of the operation. This tends to reduce risk levels and allow better access to credit for small businesses,” explains Beviláqua. “The transformation of Pronampe into a permanent government program has been without a doubt the best small business credit policy in our history.
62% of the released Pronampe money went to small businesses
Data from Banco do Brasil’s Operations Guarantee Fund (FGO) show that 62% of the Pronampe budget released so far has been allocated to small businesses; most of the operations were carried out by Caixa Econômica Federal, followed by Banco do Brasil and Santander.
In 2020, Pronampe released more than 37 billion reais in resources, including 8.7 billion reais for micro-enterprises and 28.7 billion reais for small businesses, in more than 500,000 operations.
So far, in the 2021 cycle, the federal government has invested R $ 5 billion in the program, leveraging up to five times the resources, which serve as collateral for credit operations. This means that for each real placed in the FGO, it is possible to borrow up to five in the framework of the Pronampe. In other words, up to 25 billion reais are guaranteed by the 5 billion reais initially invested.
Last year, the national financial system provided a total of around R $ 360 billion in credit just to small businesses. But of this total, only 37% of the resources came from Pronampe.
Giovanni, from Sebrae, explains that at least 50% of small businesses have applied for credit, but only a portion have obtained it. For this reason, the institution estimates a need of R $ 150 billion to R $ 200 billion in credit, which is the average of the concession in recent years.
The optimism of entrepreneurs
The pandemic has shed light on the historic problems faced by small businesses in accessing credit and finance in general, but more specifically in the credit market. Official data from the Central Bank indicates that lending to small businesses in recent years has accounted for, on average, 20% of all granted to businesses. “This percentage is very low, given the importance of small businesses in the Brazilian economy,” Baviláqua assesses.
In the international community, the scenario is not much different, despite the fact that small businesses correspond to the largest number of businesses that exist in countries. From a credit standpoint, small businesses are sectors with a lot of funding restrictions.
Despite the obstacles, surveys show that the measures applied in the country have raised the level of entrepreneurs’ confidence in the future. Optimism is driven in particular by the progress of vaccination, particularly in large urban centers, but also by emergency and business support programs, the establishment of operating safety protocols and the granting of emergency aid.
“These emergency programs, according to my analysis, were responsible, along with all the measures taken by the Central Bank, to provide liquidity to the financial system, to prevent a major contraction of the credit market in 2020,” says Beviláqua.
Data from the Central Bank also reveals that demand in the credit market increased by around 30% in the first year of the pandemic, unlike what happened during the economy’s last recession. Brazil, between 2015 and 2017, when credit to small businesses fell by only around 30%.
“This shows how the measures used have been very successful. On the one hand, with the increase in the liquidity of the credit market and, on the other hand, the support and assistance programs for small businesses,” evaluates the economist.
What changes in the new phase of Pronampe
Since June, Pronampe has ceased to be an emergency measure, becoming permanent, established by Law No. 13,999 of May 18, 2020. The program is regulated by the Special Secretariat for Productivity, Employment and competitiveness of the Ministry of the Economy (Sepec). .
Unlike the first version of the initiative, the Permanent Pronampe is experiencing changes in interest rates, deferred amortization and allocation of resources:
Entrepreneurs will have more time to repay the loan (the grace period, which is the period to start paying, has been extended from 8 months to 11 months. And the total period for businesses to repay the loan has been increased from 36 months to 48 months); 20% of the resources made available by the program go to companies in the events sector; This year, approximately 5.3 million businesses are eligible for credit; The interest rate, which was last year at 1.25% per annum plus Selic, is now up to 6% per annum plus Selic.
Pronampe’s current interest rate is still considered lower than the average market rate of 30% per year. “It’s a third of the mid-market rate, and the fact that it’s pegged to Selic is not a problem, as Selic is run by the Central Bank, which has a mandate to control inflation, and that rate is more stable. Anyway, this Selic composition plus 6% is still very low compared to the average market rates “, specifies Giovanni.