NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, January 28, 2015

Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian government’s development bank, reportedly has announced that it will loan USD 100 million to Banco do Nordeste do Brasil (BNB), a public bank operating in Brazil’s Northeastern Region. The investment will be made from the microcredit program of BNDES, and BNB will commit an additional BRL 42.8 million (USD 16.6 million) to the effort. The proceeds will be used to fund individual entrepreneurs as well as micro- and small enterprises (MSEs). The interest rate of the wholesale loan will be set according to the country’s Long-term Interest Rate (known as TJLP in portuguese), which currently stands at 5.5 percent, plus 1.1 percent [1].

As of December 31, 2013, Banco do Nordeste do Brasil (BNB) served 11 states through a network of 301 branches and a staff of 7,150. BNB offers microfinance services through a subsidiary microfinance institution (MFI), CrediAmigo, which was founded in 1998. As of 2013, CrediAmigo, which is affiliated with US-based ACCION, reported a gross loan portfolio of USD 935 million and 1.7 million active borrowers [2].

About Brazilian Development Bank (BNDES)

Banco Nacional de Desenvolvimento Econômico e Social (BNDES), the Brazilian government’s development bank, was founded in 1952 to provide long-term financing aimed at enhancing Brazil’s development. BNDES finances large-scale industrial and infrastructure operations as well as small and medium-sized private businesses. BNDES also invests in education, health, sanitation and microfinance. The bank started investing in microfinance in 1996 and seeks to support Brazilian microfinance institutions (MFIs) through the BNDES Microcredit Program. As of the December 31, 2013, the Microcredit Program had a portfolio of BRL 1 billion (USD 488 million) and was divided into BNDES Financial Agent Microcredit and BNDES Intermediary Agent Microcredit.