EIB and BNB sign EUR 200m loan to support Brazilian businesses affected by COVID-19
The European Investment Bank (EIB) has signed a loan of 200 million euros with Banco do Nordeste do Brasil (BNB), to support businesses affected by COVID-19. The loan will help meet the working capital and investment needs of Brazilian microenterprises affected by the COVID-19 epidemic in the northeast, targeting the region’s most vulnerable and very low-income borrowers. .
The BNB will finance private micro-enterprises affected by the COVID-19 epidemic, by providing short-term loans of less than EUR 1,000 through its Crediamigo program. Crediamigo offers loans to micro-entrepreneurs to help them modernize and innovate, mainly in urban areas, with a particular focus on financing businesses run by women.
The EIB loan will help support gender equality and female entrepreneurship, while qualifying for the 2X Challenge. The 2X Challenge is a leading initiative of the G7 Development Finance Institutions (DFIs), deploying and mobilizing capital to empower women and strengthen their economic participation in emerging markets.
The proposed emergency funding is part of the EIB’s political and operational response, in close cooperation with the European Commission (EC), to the COVID-19 outbreak outside the EU. It is part of the EIB’s contribution to Team Europe’s response to the COVID-19 crisis.
EIB Vice-President Ricardo Mourinho Félix, Head of Latin America, said: “Financing small businesses is one of the EIB’s top priorities to boost private sector development, productivity and job creation in these difficult times. The BNB will help Brazilian micro-enterprises affected by the COVID-19 epidemic to meet their liquidity and investment needs, while helping to promote gender equality by improving access to credit for run enterprises by Brazilian women. commits to continue working to stimulate the inclusive reactivation of the economy in Brazil and throughout the Latin America and Caribbean region ”.
Romildo Rolim, President of Banco do Nordeste do Brasil, said: “Supporting micro, small and medium enterprises (MSMEs) as key drivers of job creation and economic growth, and strengthening the role of women are the main objectives within the EU and the Member States. as part of the EU’s cooperation agenda with third countries. In the current context of a pandemic, it is important to align efforts to ensure a sustainable recovery of businesses, as well as to reduce the implicit negative socio-economic consequences, in particular for women, resulting from the slowdown in economic activity. We are proud to confirm that we have supported this initiative from its initial phase, as this action is part of the EIB’s external lending mandate, which includes an EU guarantee. We welcome 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 this. of the effort of Team Europe “.
EU Ambassador to Brazil Ignacio Ybáñez said: “Support micro, small and medium-sized enterprises (MSMEs) as key drivers of job creation and economic growth, and strengthen the role of women are major objectives within the EU and its Member States and in the EU’s cooperation with partner countries In the current context of a pandemic, it is important to align efforts to ensure a sustainable recovery of businesses , as well as to reduce the implicit negative socio-economic consequences, in particular for women, resulting from a slowdown in economic activity. We are proud to confirm that we have supported the initiative from its inception phase, as this action is part of the EIB’s external lending mandate which includes an EU guarantee. We welcome the conclusion of this agreement which, through the “Crediamigo program”, will give impetus to microenterprises mainly led by women in one of the poorest regions of Brazil and is a very good example of Team’s efforts. Europe “
The Crediamigo program 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 women entrepreneurs. BNB partners with Instituto Nordeste Cidadania (INEC), which provides direct technical assistance to final beneficiaries.
The BNB also uses a group lending methodology based on the experience of the Grameen Bank in Bangladesh (funded by the Nobel Prize awarded by Muhammad Yunus). Research shows that after 10 years of the program, extreme poverty was reduced by 50% and household income increased by 60% among beneficiaries.
The EIB in Latin America
The EIB, the Bank of the European Union, is the largest international financial institution in the world and around 10% of its lending and financing target is for the benefit of partners outside the European Union.
The EIB provides economic support to projects in Latin America by facilitating long-term investments on favorable terms and providing the technical support necessary to ensure that these projects produce positive social, economic and environmental results. Since the EIB started operating in Latin America in 1993, it has provided total financing of EUR 10.4 billion to support 139 projects in 14 countries in the region.