The Inter-American Development Bank (IDB) has approved a loan for the Brazilian Development Bank (BNDES), creating the BID-BNDES Access to Credit Program for Micro, Small, and Medium-Sized Enterprises (MSMEs) and Small Entrepreneurs in the Brazilian Amazon. In addition to the $750 million in financing approved by the IDB, the BNDES will contribute $150 million.
This initiative aims to boost sustainable, productive activities that create jobs and income. The BNDES has prioritized this operation and is moving forward with its internal processes for deliberation and legislative approval in Brazil.
To achieve a broader impact on the region’s sustainable development, the program has set specific targets for the share of resources to be earmarked for women (30%), for climate investments in low-carbon agriculture (20%) and for borrowers in municipalities with a Human Development Index (HDI) below the national average (70%). The program’s environmental commitment is underscored by a zero deforestation policy and geo-referenced monitoring of land use in beneficiary areas.
MSMEs are Brazil's main source of jobs and play a particularly central role in the Brazilian Amazon, where 75% of the population lives in cities and 8 million people are unemployed or work informal jobs. However, these enterprises still have limited access to long-term financing.
This program is thus designed to provide MSMEs with loans to fund productive investments.
“The future of the Amazon Rainforest depends on a holistic vision that protects the environment and offers sustainable economic opportunities to those living there. This approach forms the core of our Amazonia Forever program and guides the alliance with the BNDES to benefit 16,000 MSMEs in the Brazilian Amazon,” said IDB President Ilan Goldfajn.
“This loan will expand the capacity of SMEs in the Brazilian Amazon to invest in new means of production and sustainable practices, both essential for driving economic development while preserving the environment and regulating the climate, which is one of the touchstones of President Lula’s administration,” added BNDES President Aloizio Mercadante. “The investments include capital assets like machinery, equipment, vehicles, goods and services.”
Because of BNDES’s experience and close relationship with Brazilian MSMEs, it is a key partner in offering financial and non-financial services tailored to development, and in overcoming the barriers to accessing credit these enterprises face. The long-term financing from the IDB will allow the BNDES to expand its lending capacity with a multi-sector approach and indirect operations through accredited financial agents. BNDES’s indirect credit model helps decentralize and invigorate the Brazilian banking sector and can potentially mobilize additional private-sector resources for program-eligible activities to these financial institutions.
The $750 million IDB loan has a 25-year repayment term, a 5.5-year grace period and an interest rate based on the Secured Overnight Financing Rate (SOFR).
About Amazonia Forever
Amazonia Forever is the IDB’s holistic umbrella program that aims at protecting biodiversity and accelerating sustainable development in three lines of action: expanding funding, boosting knowledge exchange, and facilitating regional coordination among the eight Amazonian countries.
The program is based on five pillars: (i) Combating deforestation and strengthening environmental control and security in the context of national governments; (ii) Bioeconomy and creative economy, promoting alternative and sustainable economic activities; (iii) People, aiming at adequate access to quality education, healthcare, and employment; (iv) Sustainable cities and infrastructure and connectivity; and (v) Sustainable, low-carbon agriculture, livestock and forestry. In addition, the program focuses on promoting the inclusion of women, indigenous peoples, people of African descent and local communities; climate and forest conservation; and strengthening institutional capacities and the rule of law.
About the IDB
The Inter-American Development Bank (IDB) is devoted to improving lives in Latin America and the Caribbean. Established in 1959, the IDB partners with the public sector in the region to design and provide innovative, high-impact solutions for sustainable and inclusive development. Through financing, technical experience, and knowledge, it drives growth and well-being in 26 countries. Visit our website at https://www.iadb.org/en.
About BNDES
BNDES, one of the world’s largest development banks, is the Brazilian federal government’s main tool for long-term financing and investment in all segments of the Brazilian economy. It operates throughout the county from its office in Rio de Janeiro, where most of its activities are concentrated, and it has its official headquarters in Brasília. It also has regional offices in São Paulo and Recife.
The Bank supports entrepreneurial ventures of all sizes, including individuals, by financing investments, underwriting securities, offering guarantees and awarding grants. It seeks to achieve a positive social, environmental and economic impact, with the constant aim of creating jobs, income, and social inclusion in Brazil. The bank prioritizes innovation and regional and socio-environmental development.
Molina Medina,Vanessa Carolina
Borges De Padua Goulart,Janaina
Brasil and the IDB
The Country Office of Brazil supports efforts to achieve sustainable economic growth through increased competitiveness and productivity, with a government capable of efficiently providing public services for Brazilians, and it also addresses challenges related to gender and diversity.
Amazonia Forever
A holistic umbrella program for the region's sustainable development that aims to collaborate on forest conservation and climate action, offering economic alternatives to improve people's quality of life.