According to a recent survey by the Institute for Applied Economic Research (Ipea), in Brazil, 41 percent of entrepreneurs fail to have access to financing through banks. Over half (59 percent) of Brazilian companies have access to loans at banks, but this number is not good news. In developed countries, the average percentage is 95 percent.
For small and medium-sized companies, getting loans is even harder. According to the Brazilian Service of Support for Micro and Small Enterprises (Sebrae), 84 percent of smaller businesses do not have access to financing lines, which are mainly given to big enterprises. Besides that, high interest rates and bureaucracy keep the smaller players away from the financial products offered by banks.
Also, these individuals might not have formal documents to back up their activity – such as financial statements or even bank accounts. Therefore, traditional banks are less...