Rio Reborn: The Favela Where Cosmetics Reps Have Replaced Drug Gangs

Monday, June 27, 2011

Miriam Pereira da Lima, 29, sheds tears as she watches her daughter dancing in the square while children ride past on bikes and fly kites. “Until a few months ago kids didn’t play out on the streets,” she says, still adjusting to life after the pacificação, when the Brazilian army and police moved into the Complexo do Alemão, one of Rio de Janeiro’s infamous favelas, and drove out the drug gangs.

With peace on the streets, business opportunities are on the rise. The square where we sit – until recently known as “microwaves”, because it was where the drug lords “cooked” their victims in stacks of burning tyres – is filled with bright orange and white marquees erected by Natura, Brazil’s biggest, Avon-style door-to-door sales company. Every week the company sets up stands in different parts of the community, which has a population of 100,000, offering women the chance to get their make-up done, have a free massage and sign-up as reps.

Da Lima has come to register. “Natura is a well known brand here but an event like this could not have taken place before,” she says. “I want to be a rep because I am a widow with two kids to support and I am studying law while living at home with my parents. Everybody buys Natura products so I don’t think it will be difficult to sell them. My family and the other students at my university will be my main customers.”

“We have been working in the Complexo do Alemão for three years, but the pacificação made it easier and safer for us to access the area and expand our work,” explains Luis Bueno, one of Natura’s regional directors. “It also provided us an opportunity to help the community at a time when they need it most, because after the drug gangs leave the local economy dips as the money spent by dealers on services dries up,” says Bueno.

In February, Natura launched Projeto Comunidade. Many microcredit lenders – the Cambodian Community Savings Federation, for instance – require that a person has a good credit rating before money can be loaned. But, in a key innovation, Projeto Comunidade allows women with debts to become reps, providing loans for them to buy products to sell.

Some microfinance schemes operating in poorer communities may carry a high risk, for example when a borrower is entirely reliant on agriculture and a bad harvest prevents them paying back the loan for a whole year. But the risks in the Complexo do Alemão are lower, because many women are already making a small income by using their entrepreneurial skills for informal sector activities, giving manicures or selling products such as clothes or sweets. However, when Natura conducted a community study last year, it discovered debt was preventing many women from becoming reps. Registered with a national credit protection institution as having defaulted on an obligation, they had a “dirty name”.

“Our research found that women had not paid for items in bad faith, but rather had got into debt because of a lack of financial awareness,” explains Bueno. So Natura changed its rules. For Projeto Comunidade, where it had previously only allowed women with a debt of up to 200 reais ($125) to become vendors, it would now accept women who owed 500 reais ($315). Just by raising the debt threshold, Natura found they were able to reach 75% of women previously prevented from registering.

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