Brazil: The EIB and Banco do Nordeste do Brasil boost support for COVID-19 impacted companies

The European Investment Bank (EIB) has signed a EUR 200 million loan with Banco do Nordeste do Brasil (BNB), to support companies affected by COVID-19. The loan will help to address the working capital and investment needs of Brazilian micro-enterprises affected by the COVID-19 breakout, in the northeast, targeting the most vulnerable and very low income borrowers in the region.

BNB will finance private micro-enterprises affected by the COVID-19 breakout, providing short-term loans below EUR 1,000 via its Crediamigo Programme. Crediamigo offers loans to micro-entrepreneurs helping them to modernise and innovate, predominantly in urban areas, with a particular focus on finance for female-led businesses.

The EIB loan will help be instrumental in supporting gender equality and female entrepreneurship, whilst qualifying for the 2X Challenge. The 2X Challenge is a leading initiative from the G7 Development Finance Institutions (DFIs), deploying and mobilizing capital to empower women and enhance their economic participation in emerging markets.

The proposed emergency financing is part of the policy and operational response of the EIB, in close cooperation with the European Commission (EC), to the COVID-19 epidemic breakout outside the EU. It is part of the EIB contribution to the Team Europe response to the COVID-19 crisis.

EIB Vice-President, Ricardo Mourinho Félix, responsible for Latin America said: “Financing for small businesses is one of EIB’s key priorities to stimulate private sector development, productivity and job creation during these challenging times. Therefore, we are pleased to join forces with BNB to help Brazilian micro-enterprises affected by the COVID-19 breakout to address their liquidity and investment needs, while contributing to promote gender equality by improving access to credit for businesses run by Brazilian women. As part of our Team Europe efforts, the EIB is committed to continue working to boost the inclusive reactivation of the economy in Brazil and across the Latin-American and Caribbean region”.

Romildo Rolim, President of Banco do Nordeste do Brasil said: “Supporting Micro, Small and Medium Enterprises (MSMEs) as the main drivers for job creation and economic growth, and strengthening the role of women are the main objectives within the EU and Member States, as well as being part of the EU's cooperation agenda with third countries. In the current pandemic context, it is important to align efforts to ensure a sustainable business recovery, as well as to reduce the implicit negative socio-economic consequences, especially for women, resulting from the slowdown in economic activity. We are proud to confirm that we have supported this initiative since its initial phase, as this action is part of the EIB's external lending mandate, which includes an EU guarantee. We applaud the conclusion of this agreement, which, through the “Crediamigo program”, will give impetus to micro-enterprises, led mainly by women, in one of the poorest regions of Brazil, and represents a great example of the Team Europe effort”.

EU Ambassador to Brazil, Ignacio Ybáñez, said: “Supporting Micro, Small and Medium Enterprises (MSMEs) as main drivers for job creation and economic growth, and strengthening the role of women are major objectives within the EU and its Member States and in the EU’s cooperation with partner countries. Within the current pandemic context, it is important to align efforts to assure a sustainable recovery of businesses, as well as reduce the implicit negative socio-economic consequences, especially for women, derived from a slowdown of economic activity. We are proud to confirm that we have supported the initiative from its inception phase, as this action forms part of the EIB’s External Lending Mandate that includes a guarantee by the EU. We applaud the conclusion of this agreement that, through “Crediamigo programme”, will give a boost to microbusiness mainly led by women in one of the poorest regions in Brazil, and represents a very good example of Team Europe efforts”

The Crediamigo programme is a market leading microcredit program in South America and covers 80% of the microcredit market in Brazil, according to central bank data. Currently, 66% of its client portfolio are female entrepreneurs. BNB partners with Instituto Nordeste Cidadania (INEC), who provides direct technical assistance to the final beneficiaries.

BNB also uses a group lending methodology based on the experience of Grameen Bank in Bangladesh (funded by Nobel Prize awarded Muhammad Yunus). Research shows how after 10 years of programme, extreme poverty has been reduced by 50% and household income rose by 60% among the beneficiaries.

The EIB, the Bank of the European Union, is the largest international financial institution in the world and approximately 10% of its lending and financing target is to the benefit of partners outside of the European Union.

The EIB provides economic support for projects in Latin America by facilitating long-term investment with favourable conditions and by providing the technical support needed to ensure that these projects deliver positive social, economic and environmental results. Since the EIB began operating in Latin America in 1993, it has provided total financing of EUR 10.4bn to support 139 projects in 14 countries in the region.

To enhance the positive impact of its activities on gender equality and empower women and girls, the EIB Group adopted a Strategy on Gender Equality and Women’s Economic Empowerment and a  Gender Action Plan, with the aim of embedding gender equality and, in particular women’s economic empowerment in the EIB’s business model. It covers its lending, blending and advising work within and outside the EU.

For additional information about EIB investment in gender equality and women’s economic empowerment