Note from BW of Brazil: Repeat after me. In Brazil, “somos todos iguais” (we are all equal)! You believe me, don’t you? Of course, the reality of life presents a completely different picture than this phrase would have us believe. Today’s piece reveals yet another reason why believing in such a notion is absolutely absurd. Over the past few years, I have posted a number of articles that discuss the rise of the so-called “Afro-Entrepreneurship“, a business model based specifically on the consumer profiles of the Afro-Brazilian population and entrepreneurs of African descent. The initiative is an excellent idea and targets a parcel of the Brazilian population that has long been underserved if not completely ignored. But often times getting into the business and fully exploring this market is not as easy as it seems. We know, for example, that between 2002 and 2012, the percentage of micro and small entrepreneurs who declared themselves pretos (blacks) or pardos (browns) rose from 44% to 50%. But we also know that many of these entrepreneurs are on the micro level, have few if any employees and enter the world of self-employment due to lack of job opportunites and necessity. We also know that many Afro-Brazilians lack the access to capital to being fully development their businesses. Today’s piece explores one of the principle reasons for such difficulties.
In Brazil, the black entrepreneur has credit denied three times more than a white entrepreneur
By Márcia Rodrigues
Black entrepreneurs have their application for credit denied three times more than whites in Brazil. The statement comes from Eugene Cornelius Junior, head of the SBA’s (Small Business Administration) international trade bureau, a US government agency that provides support services to small and medium-sized businesses similar to Sebrae.
Cornelius Junior was in Brazil to participate in the event “Desvendando os Códigos do Afro-Empreendedorismo” (Unveiling the Codes of Afro-Entrepreneurship), promoted by Instituto Feira Preta and Black Codes, in partnership with the American Consulate in São Paulo and Cubo Eventos. According to him, the difference in treatment between black and white entrepreneurs, when it comes to access to credit, is much more real than we imagine.
“The fact that they don’t occupy management positions and executive positions hinders their ability to grow professionally, and in the business world, of having access to credit.”
The American executive also says that, by not offering credit for a significant portion of Brazilian society, since blacks represent 54% of the population, Brazil harms its own economy.
“They are the majority of the population, if they don’t have someone to lend money inside their family or friends, most of the time they don’t have the capital to start or expand their business. This directly impacts PIB (GDP) in a negative way. “
For him, the public and private sectors should take various actions to promote entrepreneurship and access to capital for blacks.
“It’s possible to create development programs, see which workforces are necessary to enable new business, what is needed to produce more, generate more jobs and opportunities for the population. This would reflect positively in Brazil as a whole and not, only, for Afro-descendants.”
Blacks must hold more leadership positions
Cornelius Junior says, however, that before initiating any of these measures, it is necessary to increase the confidence of the população negra (black population) about their ability.
“The confidence of the Afro-descendant population must be developed. More blacks need to occupy key positions, positions that make decisions and are responsible for putting these policies into practice so that they know they are being represented and are welcome.”
The executive says that racial discrimination is not an exclusively Brazilian problem.
“What makes the impact more profound in Brazil is the proportion of the black population. If we consider that only 13% of the US population is afro-descendente (of African descent), and in Brazil, that number jumps to 54%, the fact that they don’t occupy executive positions is more representative.”
He also states that he does not believe that the racism suffered by black Brazilian entrepreneurs is deliberate, but unconscious.
“Racial discrimination has been inherited, and when there is a shortage of blacks in leadership positions, we are creating stereotypes. It has to be realized that, in the last two years, Brazil has changed, and the country has a golden opportunity to reverse this situation and allow the change to be made more aggressively.”
American organ has a credit program in Brazil
Since last year, BID or Banco Interamericano de Desenvolvimento (Inter-American Development Bank) has been promoting Inova Capital – Afro-Brazilian Entrepreneurs Support Program – to identify black entrepreneurs with innovative ideas, high social and environmental impact, preparing afro-entrepreneurs to receive investment and present their business to investors.
According to Cornelius Junior, the initiative is important, in the case of Brazil, due to the lack of support that the comunidade negra (black community) receives.
“It has to overcome an environment that does not welcome it. It’s a battle that not everyone should have to fight. If there is a vision, a willingness to change this scenario, we will have more successful people.”
Source: UOL Economia