More than 36.4 million euros in financing: this is the amount that the National Microcredit Program (PNM) has allocated to small entrepreneurs since 2011 to set up their own business. “The PNM aims to support the creation of businesses and jobs, through small amounts of financing for people with special difficulties in accessing the labor market,” says Paulo Parreira, vice-president of the António Sérgio Cooperative for the Social Economy ( CASES).
The social component of the program – the concept of which was developed by Muhammad Yunus, winner of the 2006 Nobel Peace Prize – is precisely what sets it apart from other support mechanisms. The main goal is to ensure that everyone has access to bank loans to set up a small business, especially those who are unemployed. CASES is responsible for validating, in a first phase, the economic viability of the projects presented which, once pre-approved, will be analyzed by the panel to decide whether or not to greenlight the idea.
Paulo Parreira emphasizes “the possibility of access for all people, even those without any banking history who, in traditional processes, would have great difficulty accessing credit”. “This scope is, as far as I know, exclusive to the PNM,” he points out. And the results are visible: over the past eleven years, projects financed through this route have already created, or are expected to continue to create, more than three thousand jobs. In 2022 alone, 213 applications were validated. Of the initiators, 64% had been unemployed for less than a year, while 32% had had no economic activity for more than twelve months.
The trade, transport, accommodation and restaurants sectors are among the most dynamic.
Microcredit as a social lift
Financed through the Microinvest Line – which results from a protocol between IEFP, Banco Português de Fomento and the main national banks – the microcredit program offers an amount of up to 20,000 euros for the creation of a small business or for the consolidation of microcredits. entity projects. The biggest advantage over other financing instruments are the conditions offered, including a capital repayment period of two years, reduced interest rates (minimum 1.5% and maximum 3.5%) and interest subsidies.
It was precisely this “advantage” that attracted Rafael Cruz, who, after working in a factory for more than ten years, decided to resign to open Meeple & Co. The name takes us back to the board games that are there, the pair with specialty coffee , the central ingredient of this space, opened at the end of 2020 in Lousã. “I asked the Lousã Business Association for help in drawing up the business plan and went further. Then I received the support of CASES, who advised us on everything that needed to be done,” he explains to us. Microcredit presented itself as the ‘ ideal’ solution for Rafael Cruz, who, together with his wife, tried to do what he could to ‘reduce the investment as much as possible out of his own pocket’. Since then, he has created three jobs and built a business that is growing month after month, despite the lockdown due to the Covid-19 pandemic.
“I really think this is the right tool for anyone wanting to start a small business,” he says.
A little further north, in the city of Porto, the Brazilian Daniel Antipou used the CASES program to realize an idea that was already sustainably born. Until they applied for a microcredit, Daniel and his wife sold artisan bread that they delivered door-to-door at Invicta. “It wasn’t sustainable and we wanted to open a store to increase sales, but we had no financial resources. I found the cooperative, which has people who really want to help us be successful,” he says. After the project was approved, Daniel Antipou was able to open the first Madan store – Padaria Artesanal and employ five people, not counting the couple. “Today we already have two stores and we plan to open a pizzeria with the same concept,” he says.
The national program, says the CASES vice president, is “a long way” from exhausting the funding line scheduled for 2023, and therefore remains receptive to applications from people who want to become entrepreneurs. “The PNM is a program that interests everyone in increasing their growth,” emphasizes Paulo Parreira.
Program NUMBERS
500
Contracts was the total number of contracts executed under the National Microcredit Program between 2019 and 2022. The average value of each contract is almost 19 thousand euros.
75%
Percentage of the credit amount guaranteed by the state in this type of contracts, where only 25% of the guaranteed promissory note is awarded to the promoter.
84
Months, or seven years, is the duration of the program, with the first two years being capital shortfalls and the next five years devoted to loan repayments.
2148
Applications for financing have already been validated under the National Microcredit Program managed by CASES, since 2011, the year of its establishment.
Source: DN
