São Paulo, Brazil, October 10, 2023—IFC is providing a $250 million loan to Bradesco, one of the largest banks in Brazil, to increase access to finance for small businesses, with a special focus on companies working in the creative industries and in the north and northeast regions of the country.
The project will boost market competitiveness, help to narrow the finance gap for micro, small, and medium enterprises (MSMEs), and support Brazil's efforts towards a productivity-led economic growth.
IFC's loan will help Bradesco expand its MSME portfolio in APLs (Arranjos Produtivos Locais), which are regional clusters of companies sharing a common core activity or participating in relevant supply chains. A major source of jobs in Brazil, APLs support companies by increasing cooperation among their members and with other local institutions such as government, credit institutions, teaching and research organizations, which help to improve their success rate. A part of IFC's investment will be allocated to MSMEs from the north and northeast regions of the country, which have been traditionally underserved by the financial sector.
IFC's investment will also support MSMEs operating in creative industries, which use creativity and culture as their main input to produce creative products. A still underserved sector, it has significant potential to create jobs while fostering entrepreneurship and innovation. Moreover, Brazil's rich cultural heritage, diverse talent pool, and growing consumer base make it an especially fertile ground for creative enterprises to thrive.
Key to Brazil's economy, MSMEs account for approximately 54 percent of Brazil's employment. Yet they continue to face significant hurdles in accessing finance. The finance gap for MSMEs is $483 billion, as estimated by IFC's SME Finance Forum.
"Bradesco is the only private bank present in the APL ecosystem. These partnerships help us overcome common market barriers—lack of information or collateral—in MSME financing, expanding our reach to MSMEs. IFC's loan will especially help support the bank in building and growing its creative industries portfolio, supporting more smaller businesses in this space," says Marcelo Pasquini, head of Sustainability at Bradesco.
According to Carlos Leiria Pinto, IFC Brazil Country Manager, "increasing access to finance and improving private sector competitiveness are key priorities for IFC in Brazil. Our continued partnership with Bradesco will help narrow the country's MSME finance gap, with a focus on innovative industries and underserved regions. Developing a robust creative industry can help Brazil optimize the untapped potential of an emerging sector, contributing to diversification of product and service offerings."
IFC is focused on supporting creative industries, given the sector's growing importance and demand globally. A United Nations Conference on Trade and Development (UNCTAD) research puts the creative economy's contribution to global GDP at about 3 percent, roughly in line with its contribution to world trade. Across Latin America and the Caribbean, the creative economy has among the highest growth rates of any sector of the region's economy, generating $124 billion in revenue.
This is IFC's third investment in Bradesco directed to supporting access to finance for MSME operating in APLs in Brazil. IFC has been supporting Bradesco's APL program since 2015.
About Bradesco
Bradesco is one of the leading banks in the financial sector in Brazil. Founded in 1943, it grew and evolved following the country's trends and economic cycles. In the Insurance and Pensions market, Grupo Bradesco de Seguros is among the leaders in Latin America.To serve its more than 72 million customers, Bradesco has a broad Service Network with more than 90 thousand locations throughout Brazil and a complete service system through digital channels. In the 1st half of 2023 alone, more than 98% of transactions and 33% of credit releases took place through its Digital Channels.
Sustainability is integrated into Bradesco's strategic pillars, which incorporates it into its management through robust governance and an effective set of corporate policies and standards. Bradesco participates in several voluntary commitments that reinforce its contribution to sustainable development and the management of ESG aspects, and its performance has been recognized by the main indexes and specialized agencies in Brazil.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
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