Capillarity of financing, thanks to the FGI / BNDES guarantee for micro, small and medium-sized companies, eliminates obstacles and unlocks credit
By Francisco Camargo *
Although the laws in force in Brazil support smaller companies, there are many obstacles to the development of so-called MSMEs - Micro, Small and Medium Enterprises. Even though the Brazilian Constitution, in its article 179, establishes the role of the State in encouraging these companies, the reality has always been quite different. For this reason, since 2017, in various contacts with the government and its agencies, ABES - Brazilian Association of Software Companies has recommended special attention to the problem of the guarantees required from MSMEs and the low capillarity of government programs.
Creating and running an MPME is no easy task. It is necessary to win clients, obtain the necessary capital for investment and working capital, and also face the lack of legal certainty, which has prevailed in two key areas: tax and labor.
It is not enough to have several financing and development programs, such as those listed in the ABES Promotion Guide , if at the time of need, companies face some problems with the forwarding agents, their bureaucracy, the demand for real guarantees (mortgage, bank guarantee) and the lack of capillarity of these agents.
To access lines of credit for BNDES or FINEP projects, citing two examples, it is necessary to go through a long and costly process, especially when hiring a consultancy to help with formatting. If the project is approved, there is a requirement for collateral, mortgages or bank guarantee.
For large companies that have dedicated departments or rely on consultancies, these bureaucratic hurdles and guarantees are not usually a problem. But, when it comes to the micro or small business, the situation in practice is different from theory. And the importance of these companies is undeniable: they account for a large part of jobs and GDP - Brazilian Gross Domestic Product. In the universe of two thousand ABES member and associated companies alone, more than 75% are MSMEs that face problems similar to the above.
The need for action to ensure, in addition to the role, the effectiveness and access of MSMEs to the benefits to which they are entitled, motivated ABES to develop a work with the Federal Government and its development agencies to address the serious problem of guarantees for obtaining credit. One of the proposals was to use the various government guarantee funds, in a unified manner, so that they could insure (giving endorsement) a substantial part of the financing taken by MSMEs from commercial, public or private banks.
With that, three main problems would be solved:
• Capillarity, commercial banks have more than 20 thousand service stations spread across the national territory;
• Guarantees, because the guarantee of guarantee funds is often better than the demand for collateral;
• Resources, the federal government would not need to transfer funds from the Treasury to the BNDES, in order to meet the system's financing needs, but only to guarantee the risk represented by the MSMEs.
The Funds and the BNDES would only guarantee credit risk, as do other modern organizations. An example is the French COFACE (Compagnie Française d & #39; Assurance pour le Commerce Extérieur), which alleviates the federal government's need for cash, especially at this critical time for the Union budget.
After some time on ABES's pilgrimage to make this recommendation feasible, the team from the Special Secretariat for Productivity, Employment and Competitiveness listened and understood the scope of the demand. The solution was entrusted to the Deputy Secretariat for the Development of Industry, Commerce and Services and the Secretariat for the Development of Micro and Small Enterprises, which finally created the Emergency Program for Access to Credit, through MP 975, as well as others from the Ministry of Finance. BNDES / FINEP.
Better than exercising the right to be heard, which is provided for in Article 5, item XXXIV, item A, of the Federal Constitution, it is to know that the recommendations were legitimate and were adopted. These measures defended by ABES benefited all micro, small and medium-sized companies in Brazil, without necessarily being linked to an association or union or to a specific sector. Indeed, we see that ABES 'recommendations served as an alert for the creation of the solution that enabled MSMEs to have access to credit lines, which are very necessary in this time of Covid-19.
ABES expects this system to be perfected for more "normal" times, through the creation of a Brazilian System of Guarantees and Sureties, which, through the coordination of all endorsement funds, of the Union, States, Municipalities, Banks, Associations, allows to reduce the systemic risk by the purchase and sale of Credit Swaps. The system will be safer and cheaper when the surety funds can also receive, directly or indirectly, conventional (receivables etc.) and unconventional (shares or quotas, brands, patents, systems etc.) counter-guarantees, from the benefited companies, reducing the cost charged for these endorsements.
ABES aims to contribute to the construction of a more digital and less unequal Brazil, as we believe that information technology plays a fundamental role for the democratization of knowledge and the creation of new opportunities, improving the quality of life for all, inclusive and egalitarian way, ensuring a business environment conducive to innovation, ethical, dynamic and globally competitive.
ABES thanks everyone involved for having found the solution in such a short period of time.
* Francisco Camargo is chairman of the board of ABES - Brazilian Association of Software Companies and founder of CLM, a Latin American distributor of added value.
NB: All ABES recommendations are made technically, in a public and transparent manner, according to your Integrity Program .
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