6. Brazil

Micro and small enterprises (MSEs) form an essential part of the Brazilian economy, accounting for 93.7% of all legally constituted companies (20.3 million) according to the Enterprise Map as of December 2023.

The reference interest rate of Banco Central do Brasil (Special Clearance and Escrow System - SELIC) has gradually declined, from 14.15% per annum in December 2015 to 2.0% in January 2021. The previous period of a rate hike (from 7.25% in March 2013 to 14.25% in September 2016) led to high-interest rates on loans for large corporate borrowers (14.8%) and SMEs (30.6%), leading to a shrinking demand for new SME loans. Interest rates have increased more for micro-enterprises and SMEs than for large businesses. However, this trend was reversed when the Central Bank decreased its rate at the end of 2016, thus decreasing interest rates for SMEs. Since January 2021, the reference interest rate increased substantially, returning to the standard seen previously in 2016, reaching 13.75% in August 2022 and being adjusted to 12.25% in the second semester of 2023, which impacted SME loans.

The stock of SME loans fell in 2015 and new lending to SMEs declined in 2014 and 2015. Both observations contrast with lending to large businesses, where the outstanding stock of loans, as well as new lending, was up in 2014 and 2015. A sharp rise in both new lending and outstanding stock of loans was observed in 2020 due to measures adopted in the context of the COVID-19 pandemic (especially through programmes such as Pronampe and PEAC). The level of lending (stock and flows) was maintained in 2021 and 2022, reflecting an increase in the share of SME loans over total loans.

Since 2008, large companies have received a larger share of business loans than SMEs. The government has taken on a more active role in this area, often with the aim of providing financial services to small businesses excluded from traditional financial institutions. Developments include a micro-credit programme, a quota to use 2% of demand deposits of the National Financial System to finance loans to low-income individuals and micro-entrepreneurs, and a strong increase in the number of agencies where financial services are provided.

In the area of equity finance, the regulatory framework for angel investors was revised in 2016 and further adjusted in 2017, removing some long-standing barriers for investors in SME markets, in particular by offering more legal protection in the case of company closures, more flexibility in the type of investment and more information sharing between recipients and investors. In addition, new regulations concerning investment-based crowdfunding and Fintech were introduced in 2017 and 2018, fostering financing digital companies and more competitive market.

In October 2023, the Brazilian government created a Ministry for Entrepreneurship, Micro and Small Enterprises, highlighting the importance of SMEs in the Brazilian agenda.

Regarding the government guaranteed loans indicator, it is worth mentioning that the 2020 figure includes two of the emergency credit programmes launched by the federal government in the context of the COVID-19 pandemic (National Program to Support Micro and Small Enterprises – Pronampe, and Emergency Employment Program – Pese). In both cases, relevant federal government guarantees aim to promote debt finance.

In October 2023, the Brazilian government created a Ministry for Entrepreneurship, Micro and Small Enterprises, highlighting the importance of SMEs in the Brazilian agenda.


[1] Banco Central Do Brasil (2023), Taxas de juros básicas – Histórico, https://www.bcb.gov.br/controleinflacao/historicotaxasjuros.

[2] Gov.br (2023), Painéis do Mapa de Empresas, https://www.gov.br/empresas-e-negocios/pt-br/mapa-de-empresas/painel-mapa-de-empresas.

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