The purpose of the present report is to evaluate the performance of Brazilian SCMs operating from February 2000 to December
2004, since they are private institutions with the economic goal of operating in the microcredit segment, as opposed to
commercial banks, which operate in a larger number of financial service segments. SCMs are subject to Banking supervision as
commercial banks.
2.
L
iterature Review
In this report, the concept of microfinance by Alves & Soares (2006, p. 28) has been applied, as follows: “Microfinance is
providing satisfactory and sustainable financial services for the low-income population, using distinctive products, processes and
administration”. The concept of microcredit is based on Barone, Dantas & Rezende (2002, p. 11), as follows: “Microcredit is the
concession of small loans to informal microentrepreneurs and microentities which normally have no access to these services
through the traditional financial system, especially since they do not own assets that can be offered as collaterals. It regards
financing projects directed towards production (working capital and investment), granted through specific methodologies.”
There is a need to analyze the microfinance segment in view of the different groups of institutions included therein. On the one
side, there are the non-profit organizations, which are constituted by NGOs; and Civil Public Interest Organizations - OSCIPs
which depend upon donations and loans from third parties, such as governments and multisided political bodies, whose main
purpose is social contributions associated to financial results. On the other side, for-profit organizations such as Non-banking
Financial Institutions (NBFIs) as MIFs and commercial banks have their own resources and more alternatives of fund resources,
such as individual investors, investment funds, interbanking market and deposits. Credit cooperatives are usually not considered
as MIFs since they focus on higher income market niche.
2.1 Microcredit in Latin America
Marulanda & Otero (2005) recently gathered data on 120 leading MIFs in Latin America with the purpose of providing a recent
microfinancial overview and of analyzing the main development tendencies for the next few years. Table 1 indicates results
thereof and Table 2 indicates the portfolio evolution by group of institutions in the last 10 years.
1
Organizações civis de interesse público
3
Convention