|
 A survey by Brazil's Micro and Small Business Support Service shows
that most of the Brazilian micro and small companies felt the impact of
the international financial crisis, from reduced demand to more
expensive credit. The international financial crisis has, in fact,
affected 63% of micro and small Brazilian businesses.
Out of every 100 micro and small companies, 63 had or are still having trouble dealing with the consequences of the world economic crisis, such as reduced demand and more expensive credit.
These were the main results of the survey "Impact of the International Financial Crisis on Brazilian Micro and Small Businesses," conducted from March to May 2009 among 4,200 micro and small companies across the country, by the Brazilian Micro and Small Business Support Service in the state of São Paulo (Sebrae/SP).
According to Ricardo Tortorella, superintendent of the Sebrae/SP, the international crisis has the worst impact on activities that depend on financing, which is the case with the industry and export-oriented agribusiness.
"The activities that are more dependent on consumers' income are less impacted by the crisis, such as, for instance, the trade and services sectors. This should be the trend for all of 2009," he claims.
Among the impacts felt by businessmen, those that stand out are reduced demand (60%) and interest rates (45%), ranging from high interest rates (45%) to problems obtaining financing (40%).
"The problem in obtaining credit does not occur solely in times of crisis. Micro and small businesses have a hard time when it comes to offering guarantees and presenting all of the documents required when the time comes to apply for financing," explains Tortorella.
The rising costs of imported products and the reduction of grace periods were also listed by businessmen (33% and 24%, respectively). On the other hand, only 2% of interviewees pointed out to an increase in insolvency rates by clients, dismissals, decreased profits and reduced exports as consequences of the world crisis on their businesses.
In terms of regions, owners of companies in the Brazilian Southeast and Midwest claimed to have been the most affected by the economic crisis, at 64%. "Those are regions that concentrate industries and export-oriented agribusinesses, which were more strongly affected by the reduction in the level of activity and of consumption abroad," says Tortorella.
In terms of states, Goiás had the highest rate of companies affected: 72% of businessmen were or are being impacted by the consequences of the crisis. The lowest rate, on the other hand, was that of the state of Santa Catarina.
Whereas the Southeast Region (62%) felt the strongest impact from reduced demand, the rate was lower in the South (57%). Businessmen in the Northeast were those who complained the most about difficulties in gaining access to credit (43%).
In terms of sectors, industry had the highest rate of companies harmed by the world economic crisis, at 67%, followed by trade and services (66% and 56%, respectively). "The international financial crisis impacted more intensely on industrial activities, because they are more dependent on exports and bank loans, be it for funding their working capital or leveraging their sales on the market," explains Marco Aurélio Bedê, a consultant for Sebrae/SP.
Within the industry, the most affected segments were durable consumer goods (machines and electric appliances) and capital goods (machinery and equipment).
"At times of economic uncertainty, those industries are usually the most harmed, because they depend on two variables: high product cost per unit and the granting of credit in order to sell. Such is the case, for example, of a small industry that manufactures furniture, and sells a bookshelf for 1.500 reais (US$ 750, a high cost per unit) on credit," says the consultant.
The decreased demand was also felt in activities pertaining to trade. "When it comes to trade, aside from credit being more expensive and harder to obtain, there is also the greater uncertainty and the psychological effect on consumers, who have either reduced or postponed their long-term purchases," says Marco Aurélio Bedê.
Even nine months after the onset of the world crisis, 42% of micro and small business owners assert that there has been no improvement in the supply of funds for loans from banks. Another 30% consider that the credit supply has improved, whereas 28% did not know how to reply.
Businessmen in the North are the most pessimistic regarding an improvement in the supply of funds: 45% claim that there has been no improvement in credit supply, as against 37% in the South. On the other hand, micro and small businesses in the Midwest felt that the volume of funding available in the market has increased (34%).
For the next six months, the majority of businessmen are working with a realistic scenario, the highlight being an optimistic forecast of increasing revenues (46% of respondents). With regard to the number of employees, 67% should maintain their current personnel, and only 8% intend to dismiss workers.
"The good news is that Brazil belongs in the globalized world. Besides, Brazilian entrepreneurs are persistent, daring, and willing to take risks. Al of that is important in times of crisis," Tortorella finishes off.
Sebrae
 |
Subscribe to this comment's feed
Brazil received a huge boost in its international image with its selection as the host of the 2016 Olympics, but it was really just the cherry on top of the overall recognition of the country's ascension to the ranks of one of the world's most important countries. Now, as it finally takes its place on the world scene, there has been a great deal of concern about what kind of image Brazil hopes to project, now that the world is really paying attention. 
The only good thing to say about the visit to Brazil of Iran's president, Mahmoud Ahmadinejad, on Monday November 23, is that it was mercifully short and lasted less than 24 hours. Ahmadinejad had his picture taken being hugged by president Luiz Inácio Lula da Silva who gave him a warm welcome and said Iran had every right to develop nuclear energy for peaceful purposes. 
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose.