Cooperativism and Microcredit: an analysis of the participation of cooperatives in the supply of microcredit in Brazil

Ana Lucia Carvalho Santos,José Renato Sena Oliveira,Elise Soerger Zaro

doi:10.33448/rsd-v11i2.25534

Abstract

This study analyzes the participation of Brazilian credit unions in the provision of microcredit in the period from 2017 to 2019. The cooperatives belonging to the four main cooperative credit systems in the country were considered: Cresol, Sicoob, Sicredi and Unicred. To meet the proposed objective, a documentary research was carried out as from the survey of secondary data from official agencies, in addition to data from the financial and accounting reports of the analyzed institutions. The literature consulted points out that credit unions have a greater incentive to carry out solidarity credit and microcredit operations, given their social nature. The results presented evidence that the microcredit offer by the analyzed cooperative systems is not very significant, representing, on average, less than 10% of the total microcredit portfolio in the analyzed years. The main conclusion is that most Brazilian credit unions, with the exception of those that compose the solidarity segment, have not had a significant participation in the supply of microcredit. It is hoped that these findings can contribute to the development of policies capable of changing this picture, that is, that these institutions, considered by the literature as the ideal model of organization to operate microcredit, can potentialize actions towards a greater insertion in the supply of microcredit.

Highlights

With the current economic crisis triggered by the Covid-19 pandemic, financial assistance to the vulnerable and workers, as well as the provision of credit to micro and small businesses and to micro and small individual entrepreneurs, has become a worldwide need
As for the Credit with Solidarity Interaction (Cresol) system, as was seen, it is a cooperative solidarity credit system, and it does not present separate data in its financial reports, it emphasizes in all documents analyzed that microcredit is in its essence
In Cresol’s 2017 report, the statement appears that microcredit is fundamental to the advancement of the economic and social organization of family farmers and that Cresol started to seek partnerships to leverage resources for the program (Cresol, 2017) but there is no report on the offer of microcredit. no document 2018, the report is restricted to the amount of the transfer of BNDES resources, and states that Cresol occupied the 6th position in the ranking of indirect transactions physical person BNDES, with transfers of more than R $ 1,1 billion in approximately 40 thousand rural credit and microcredit operations (Cresol, 2018), but there is no mention of the other modalities of resources used in microcredit operations

Summary

Introduction

With the current economic crisis triggered by the Covid-19 pandemic, financial assistance to the vulnerable and workers, as well as the provision of credit to micro and small businesses and to micro and small individual entrepreneurs, has become a worldwide need. In the case of Brazil, the Federal Government created three financial assistance programs during the pandemic: (I) emergency aid, aimed at the unemployed and informal workers; (II) The National Support Program for microenterprises and small businesses (Pronampe), a credit line intended to finance small businesses, individual microentrepreneurs (MEIs) and small businesses (working capital); and (iii) the emergency access to Credit Program (Peac), aimed at small and medium-sized companies (working capital or investment) These examples illustrate the relevance of microcredit in times of crisis and how the proper use of this tool can contribute to boosting economic activity. The history of cooperativism has corroborated this view, and cooperativism enthusiasts consider it to be the business model best prepared to face economic crises

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Conclusion