Ventures in the Informal Sector, and How They Worked Out in Brazil

摘要

Unusually high (92%-98%) repayment rates, a competent and dedicated staff, low overhead, ability to reach firms previously without access to formal credit and to attract public funding, and avoidance of political intervention are some of the strengths which have led many to consider the Northeast Union of Assistance to Small Businesses (UNO), a Brazilian PVO established in Recife in 1973, a model of how to provide credit to small businesses. Surprising weaknesses, however, such as high operating costs (ranging from 46% to over 100% of loan value), low productivity (especially in light of UNO's use of low-paid student workers), slow growth (reaching only 1% of the client population), inability to attract private sector financial support or become financially independent, and the failure of assisted firms to increase output, create new jobs, or gain access to bank credit - cast doubt on the replicability of UNO's program. This study discusses these interrelated strengths and weaknesses in light of UNO's history, operations, and beneficiaries.