Institutional Action Plan Raffle Winner: Banco do Planalto Norte (Brazil)

Congratulations to this week’s winner of the Raffle for Institutional Action Plan Submitters: Banco do Planalto Norte!

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Banco do Planalto Norte, the colloquial name for Brazil’s “Society of Credit for Microentrepreneurs of Planalto Norte” (Sociedade de Crédito ao Microempreendedor do Planalto Norte), is an NGO working towards four main objectives: 1) the provision of microcredit with the aim of creating, growing, and consolidating formal and informal micro and small enterprises headed by individuals of society’s lower classes; 2) the promotion of economic growth, social development and the fight against poverty; 3) the advancement of educational initiatives through the provision of technical assistance and capacity building exercises for micro- and small entrepreneurs and their employees, in hopes of bettering the management and competing power of their businesses; and 4) the fostering of peace, ethics, human rights, democracy and other universal values.

Banco do Planalto Norte’s Executive Director, Nivaldo Brey Junior

The concept of productive microcredit appeared in the state of Santa Catarina (located in the south of Brazil) in the late 1990s. Through a government-sponsored initiative, 19 microcredit operations were launched and placed in strategic regions throughout the state.  This initial push for the introduction of microcredit was the result of several organizations working together under the leadership of the Agency for the Advancement of the State of Santa Catarina (Agência de Fomento do Estado de Santa Catarina – BADESC), which to this day remains one of the organization’s most important partners. Banco do Planalto Norte opened its headquarters in April of 2000, and shortly afterwards, in 2001, inaugurated two additional branches in the cities of Mafra and Porto União.  Today it serves clients from twelve municipalities in Santa Catarina, as well as three municipalities in the neighboring state of Paraná.

Twelve years later, Banco do Planalto Norte still functions as a non-profit NGO, which since 2002 has been labeled a “Civil Society Organization of Public Interest” by Brazil’s Ministry of Justice.  It currently serves 1,713 borrowers with outstanding loans totaling R$ 3,478,883.17 (about USD$ 1,725,094.45). Approximately 67.63% of the activities it finances are informal, and nearly 50% of them have been around for more than six years. Interestingly, the second largest demand for credit comes from borrowers with brand new businesses (six months or less), which make up 32.23% of all clients. A total of 1,998 jobs have been created, and another 16,676 have been maintained through the organization’s provision of microcredit – quite significant numbers for a still budding project. The average client borrows around USD$ 1,119.21, which may seem a large amount for a microenterprise, but makes sense when we consider that Brazil has an average GNI that is larger than many other countries where microfinance has become prevalent in the last few years.  Additionally, nearly half of all borrowers (43.31%) completed high school and are thus more educated than the country’s poorest.

The institution works under the premise that microcredit is one of the most important tools for sustainable and solidary development. It works to distribute the expansion of economic activities in order to reduce the inequality gap and indicators of poverty in the region.  Through microcredit, the bank believes people can redeem their dignity: “when a person who has never been able to borrow money pays back their first installment, she is filled with immense happiness, because she is proving herself to be capable of making enough to cover her debts. She realizes she is worth more than what others had deemed.”