Disbursements to micro, small, and medium-sized enterprises (MSMEs) totaled R$ 13.3 billion for the first six months of 2017
Approvals for Finame, credit line for capital goods, grew by 42% in the period, totaling R$ 11 billion
Disbursements to the Agriculture and Cattle-raising sector totaled R$ 6.9 billion between January and June, up 3%
Micro, small, and medium-sized enterprises (MSMEs) were particularly important in the operational performance of the Brazilian Development Bank (BNDES) in the first half of 2017 with the increase in their participation in the institution’s total loans. Between January and June 2017, BNDES disbursed R$ 33.5 billion. Of this total, 40% was loaned to MSMEs, businesses with annual revenue of up to R$ 300 million. This is the largest participation reached by the segment in BNDES’ first- half releases in six years. There was R$ 13.3 billion in nearly 173,000 operations with MSMEs in the first half of 2017.
Between 2015 and 2016 the share of MSMEs in BNDES’ loans had already increased from 27% to 31%. The stronger growth of this participation this year is associated with a series of initiatives from BNDES to expand and simplify the access of this segment to its credit, one of the priorities of the Bank's new operational policies, launched in January. These measures include the creation of new distribution channels, extension of maturity dates and expansion from R$ 90 million to R$ 300 million of the revenue limit for enterprises to meet BNDES’ financing conditions for MSMEs. Last month the president of BNDES, Paulo Rabello de Castro, launched the MSME Developer Channel, a strategic milestone in the Bank's operation with this segment. In three weeks, the channel had more than 50,000 consultations and received about 5,700 requests. In addition to providing entrepreneurs with further information about the BNDES’ credit for MSMEs and expediting the requests, the digital environment aids the Bank in better knowing this audience to continue enhancing its instruments according to the needs of this segment, which is the largest source of employment in the economy.
This means not only improving the conditions of credit lines. One of the main obstacles to access the credit for MSMEs, for example, is the requirement of guarantees. To assist MSMEs in overcoming this deficiency, the BNDES Investment Guarantee Fund (BNDES FGI in Portuguese) was created in 2009, which complements the guarantees offered to financial agents without exempting credit borrowers of their financial obligations. The fund had rules improved in the beginning of this year. There was expansion from R$ 1 million to R$ 3 million for the maximum limit to be guaranteed by operation with the Fund only requiring the approval of the business partners of the enterprise requesting the credit. Another change was the increase to 80% of the financing limit to be guaranteed in all modalities covered by the BNDES FGI. The number of operations of the Fund more than quadrupled in the first half of 2017 compared with the same period of the previous year. There were 1,850 operations in the first half of this year, with guaranteed value of R$ 348.4 million for financing operations that totaled R$ 463 million. In the first six months of 2016, the BNDES FGI had posted 436 operations with R$ 144.8 million in guarantees concerning financing operations of R$ 201.7 million. Another highlight of the first half of this year was surpassing the mark of R$ 6 billion in loans already granted with the guarantee of the FGI since its creation.
Working capital - Another contributing factor for the increased participation of MSMEs in the BNDES’ disbursements in the first half of 2017 was the accelerated growth of the credit line for working capital BNDES Progeren, which totaled R$ 3.3 billion in disbursements in the first half, up 367% over the same period last year. MSMEs received 82% of the amount loaned in the first half of the year through this credit line, which was created with the objective of supplying companies with short-term capital to get through the current context of the economy while maintaining production capacity and jobs. In June, the BNDES Progeren disbursed R$ 603 million (up 384% over the amount loaned in the same month in 2016), a little less than the amount released through this line throughout the first half of last year (R$ 706 million).
Finame - Another credit line of BNDES that promoted greater participation of MSMEs in the Bank’s total disbursement was Finame, which finances the purchase of machinery and equipment. Of the R$ 8.7 billion disbursed through this credit line in the first half of 2017, 65% went to MSMEs. Disbursements of the Finame closed the first half practically stable compared with the same period in 2016, down 1%. However, approvals had significant growth of 42%, reinforcing the expectation of recovery of disbursements in the second half. Between January and June this year Finame approved almost R$ 11 billion in credit, boosting the increase in productivity in enterprises and in the countryside and the demand of the capital goods industry.
In May this year, disbursements of Finame had posted the first growth (11%) over the same month in the previous year since September 2014. In June, this growth accelerated to 28% over the same month in 2016, totaling R$ 1.7 billion in disbursements. In the same month, just over R$ 2 billion was approved in this line, up 39% over June 2016. Approvals of Finame tend to be converted quickly into investments because the contracting and the disbursement occur , in less than two weeks on average.
Aggregated data - Still reflecting the economic situation of low demand for credit for investments in the last two years, BNDES’ total disbursements for the first six months of this year totaled R$ 33.5 billion, down 17% over the same period in 2016. The result maintained the deceleration of the decline in disbursements initiated last year. In the first half of 2016, the amount released by BNDES fell 42% over the same period in the previous year. The second half showed a more moderate decrease of 28%, also over the same period in 2015. Now, the result of 17% confirms the trend.
In the segment of MSMEs, releases fell by 4% in the half-yearly comparison, far less than the 23% decline in disbursements for large companies, which totaled R$ 20.2 billion in the first half of the year. Consequently, the participation of MSMEs in the BNDES’ total disbursement increased, led mainly by medium-sized enterprises.
In the distribution according to sectors, the Agriculture and Cattle-raising sector was the only one with expansion, of 3%, totaling R$ 6.9 billion in disbursements in the first six months of the year, reflecting the record crop and the agricultural programs of the Federal Government. In the same period, releases for Infrastructure fell 6% over Q1 2016, but there were positive results for the sectors of Telecommunications (475%) and Electricity (42%). Trade and Services and Industry had the greater declines: 13% and 42%, respectively.
BNDES’ approvals totaled R$ 32.2 billion in the first half, a 26% drop over the same period in 2016, but there was growth in infrastructure sectors such as Electricity (108%), Telecommunications (51%), and Road Transport (8%). Consultations and qualification analyses, first steps in the processing of credit applications at BNDES, decreased by 15% and 13%, respectively. However, some sectors are noteworthy due to the significant increase in consultations, which reflect intentions of investment in the short term, such as Pulp and Paper (1,983%), Chemicals and Petrochemicals (216%), Mechanics (62%), and Food and Beverages (35%).
In the regional distribution, the amount of resources released by BNDES between January and May grew in the Northeast (9%) and in the Midwest (8%). The decline in disbursements was concentrated in the Southeast (-28%), South (-20%), and North (-16%).