Operating statistics of the Brazilian Development Bank (BNDES) in the first quarter of 2017 reinforce the expectation of improving economic activity, with gradual recovery of the demand for BNDES funds throughout the year. An important sign appears in the numbers of the line BNDES Finame, which finances the acquisition of machinery and equipment. The approvals of this line (step prior to disbursement) increased 32% in the first three months of the year, in comparison with the first quarter of the previous year. R$ 4.6 billion were approved between January and March of this year against R$ 3.4 billion in the first quarter of 2016.
Consultations for financing in the infrastructure area also increased 25% in the first quarter of 2017, with projects totaling R$ 9.3 billion. In the Trade and Services sector, consultations increased 14% compared with the same quarter of the previous year, totaling R$ 5.3 billion. Another positive highlight in the quarter was the increase of 46% of disbursements for innovation, which totaled R$ 590 million.
Global numbers of disbursements, however, for reflecting consultations in previous years, take a little longer to respond. Still reflecting the economic framework of lower demand for financing in the last two years, the total of disbursements in the first three months of this year totaled R$ 15.1 billion, with decrease of 17% compared with the same period last year.
In March BNDES disbursed R$ 5.1 billion with 18% decrease compared with the same month last year, when R$ 6.2 billion was disbursed. Finame disbursements totaled R$ 4.1 billion in the first quarter of this year, 11% below the figure released in the same period last year.
It is noteworthy, however, that the decrease of disbursements is slowing down. In the first half of 2016, disbursements decreased 42% compared with the same period of the previous year. The second half showed milder decrease, 28%, also in relation to the same period of 2015. The decrease of 17% in the first quarter of 2017 confirms this trend.
Working capital and MSME – As a result of the economic context, the BNDES Progeren line, which finances working capital for companies with difficult access to short-term credit, continued as the main highlight in the disbursements of the first quarter. The line disbursed R$ 1.8 billion in the first quarter of the year, an increase of 345% compared with the same period of 2016. In just three months, BNDES Progeren disbursed more than half of the volume of credit released in this line for the whole of last year, which amounted to R$ 2.7 billion. In 12 months the total was R$ 4 billion, an increase of 138% compared with the previous year. About 80% of these funds were for micro, small and medium-sized enterprises (MSME), helping to increase the participation of the segment in the total volume of disbursements from the Bank, and avoiding more companies to enter judicial reorganization or bankruptcy, with the consequent loss of productive assets and jobs.
Between January and March of this year BNDES disbursed R$ 6.2 billion in more than 80 thousand operations with MSME, 41% of everything the Bank lent in the period. It is the largest share achieved by this segment on disbursements from the Bank in a quarter in the last three years. In the first quarter of 2015 and 2016 such participation corresponded to 30% and 39% respectively. In the last 12 months, between April 2016 and March 2017, the segment accounted for 31%.
The growth of the participation of MSME in BNDES disbursements reflects a number of initiatives launched in recent months to expand and simplify the access of this segment to credit from the Bank. Among them, creation of new distribution channels of the BNDES card, maturity increase, greater agility in processes, and the expansion from R$ 90 million to R$ 300 million of the revenue limit for the eligibility of companies in BNDES financing conditions for this segment.
The first quarter of this year had an increase of 27% in releases for medium-sized enterprises but there was stability between small enterprises and 33% decrease of disbursement to micro-enterprises. That explains the 11% decrease of disbursements for MSME in the period, despite the participation advancement of the segment in total disbursement of the Bank. The decrease of disbursements for large companies was nearly twice as high: 20%, compared with the same period of the previous year.
Farming and Cattle Raising – Among economic sectors, Farming and Cattle Raising stands out with R$ 3.3 billion released between January and March of this year, an increase of 6% compared with the same period last year. Motivated by the record crop, the sector was left with little more than 22% of everything that BNDES lent for investment in the first three months of this year, reflecting various agricultural programs of the Federal Government.
The largest share of BNDES disbursements went to Infrastructure, which accounted for 33.5% of the total with little more than R$ 5 billion in the quarter. Despite this cipher meaning a decrease of 13% compared with the first quarter of 2016, three segments of Infrastructure stood out positively. Rail transport and electric power had, respectively, an increase of 106% and 9%. The telecommunications sector amounted to disbursements of R$ 693 million in the first three months of the year, an increase of 929% compared to the same period last year, with a concentration of investments in modernization of networks.
Trade and Services sector stayed with almost 24% of the funds released by BNDES in the first quarter, totaling R$ 3.6 billion (-2%). The largest decline in the comparison with the same quarter of last year was in the Industry (-43%), whose idle capacity has not stimulated investments. R$ 3.1 billion were released, little more than 20% of the total disbursement of BNDES.
Regarding the regions, the release of credit for investments in the Northeast and Midwest increased respectively 14% and 29% in the first quarter, while there was a decrease in other regions in comparison with the same period in 2016. The largest decline was in the South region with a reduction of 35% of disbursements.
The BNDES Performance Bulletin is available here.