Thanks to Itaú Unibanco, one of the world’s largest banks, 100,000 small-scale entrepreneurs in Brazil will now have access to credit. As a part of its commitment to Business Call for Action, an international initiative backed by the UN Development Programme that encourages the private sector to fight poverty, Itaú Unibanco will expand microcredit in Brazil by distributing $167 million in microloans to Brazilian entrepreneurs.
The program targets entrepreneurs working in urban areas because 85% of Brazilians live in cities, although up to 40% do not have access to formal financial services. In addition, there are over 10 million informal and unregistered enterprises in Brazil, with the shadow sector accounting for 17% of the country’s economy. This means that millions of people are excluded from accessing financial services that could help their businesses, subsequently lifting more people out of poverty and providing them with a safety net that could make them more resilient in the face of economic or financial problems.
The program will use mobile technology to reach small-scale entrepreneurs who lack the required information, credit history or income to access bank loans. The bank will also work to improve the financial literacy of clients by educating them about financial planning or spending controls.
The goal is to promote the economic and social inclusion of underprivileged Brazilians, ultimately contributing to the country’s development.
– Caroline Poterio Martinez
Source: Business Call to Action
Photo: Del Campe