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Sao Paulo’s low income food-services microentrepreneurs to increase their access to credit

The Inter-American Development Bank approved a $10 million loan to help major wholesale distributor Tenda Atacado, Ltda. enhance its credit program for low income microentrepreneurs in the food services sector in the state of Sao Paulo, Brazil.

The loan from the Bank's Opportunities for the Majority Initiative will boost the access of street vendors, small food shops and other small grocery suppliers known as Transformadores—because they transform raw foodstuff into ready-to-eat goods—to credit and business training.

The proceeds of the loan will finance Transformadores’ working capital needs; acquisition of productive assets such as appliances, equipment, carts, counters, etc, as well as repairs and improvements of their productive assets. A training program will be implemented to help improve the business skills and raise the income of a sector that employs more than five million people.

Many microentrepreneurs must return to the store several times a day simply because their cash income is only sufficient to buy a few supplies at a time. Credit for working capital to buy supplies will help them save time and money.

Access to financing for their working capital needs and minor capital expenses would allow the Transformadores to better manage their operations and cash flow, improve their productivity, and be able to increase their sales, which in turn will help them to better meet the daily needs of their households.  

The IDB's Opportunities for the Majority Initiative promotes market-based, sustainable business approaches that engage private firms, local governments and communities to deliver quality products and services to improve the quality of life of low-income sectors.

The loan is complemented by a $270,000 technical assistance grant from the Korean Poverty Reduction Fund that will help finance the training program.

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