Small Businesses in Rio Grande do Sul Rebound from Floods with Targeted Credit Support
Small enterprises in Rio Grande do Sul are recovering from flood damages through low-interest loans from Fundo Estímulo Retomada RS, aiding revenue recovery and job retention.
- • 64.2% of small entrepreneurs faced client and sales losses due to flooding.
- • 52.7% of loan recipients used funds to pay debts, 7% for repairing flood damage.
- • Fundo Estímulo Retomada RS provided low-interest loans averaging R$ 74,000 to 665 entrepreneurs.
- • Loans favor low-income regions, with 30% first-time borrowers and 28% women-led businesses.
- • R$ 15 million available in credit until year-end, with quick approval and minimal bureaucracy.
Key details
Small businesses in Rio Grande do Sul are showing signs of recovery from the extensive damage caused by recent flooding, thanks largely to targeted credit programs. A study by Fundo de Impacto Estímulo found that 64.2% of small entrepreneurs experienced a decline in clients and sales, and 23.5% reported partial damage to their establishments. Many took credit to stabilize their operations, with 52.7% using loans to pay off debts and 7% investing in repairs. About 60% of these entrepreneurs have managed to regain some of their lost revenue, and nearly 70% have maintained their employee base.
The Fundo Estímulo Retomada RS has been pivotal, offering low-interest loans (around 1%) averaging R$ 74,000 to 665 entrepreneurs across 116 cities. These loans require minimal bureaucracy and quick initial approvals. Notably, 93% of recipients come from low-income areas, with 30% receiving credit for the first time and 28% of businesses led by women. The fund still has R$ 15 million available for lending through year-end.
Personal stories illustrate the impact: Carina Castro kept her fashion business afloat following a 30-day flood closure thanks to a R$ 24,000 loan; Ricardo Leal rebuilt his automotive parts factory with a R$ 200,000 loan after multiple disasters; and Juliana Dalmaso, who leads a female-owned transportation business, plans fleet expansion after a R$ 90,000 credit injection.
To qualify, businesses must have been active for at least two years, with monthly revenues between R$ 10,000 and R$ 400,000, and maintain positive credit records. The program director, Lucas Conrado, emphasizes that supporting local entrepreneurs is critical for regional economic recovery.