Supporting small business in Rio de Janeiro

Supporting small business in Rio de Janeiro

Constancia Couto

Constancia Couto, by Opmeer Reports

02 January | 2014

In what’s commonly known as the "favelas" of Brazil’s Rio de Janeiro, groups of women come together to design and make handicrafts for a living. Rio de Janeiro’s favelas are built around the edge of the main city and are associated with extreme poverty. The women’s groups are part of Asta, a cooperative which aims to teach women how to make products whilst providing a sales channel to sell them.

Asta buys the products at a fair price from the women and sells them to corporate clients, online and at a store in Rio de Janeiro. Without the income from Asta, many of these women would have to clean houses or work manual labour.

This is the case for women like Constancia Couto, who is part of a women’s group that sells its handicrafts to Asta. Constancia and her group make arts and crafts, such as fabric cats, flowers and other products to earn a living. 

Constancia says being part of the group not only gives her a source of income, but also a sense of joy and self-respect.

“When I’m not making handicrafts for Asta, I spend my time teaching children in my neighbourhood from problematic backgrounds how to make crafts,” said Constancia. “I find it rewarding to pass on my skills to the children,” added Constancia.

A few years back, Asta needed working capital to pay the women for their products. Initially, foundations and charities helped Asta to develop. Regular banks were not interested because the amount of working capital was too low.

That’s when microfinance institution Sociedade de Crédito ao Microempreendedor SA (SOCIALCRED) came in to provide Asta with the capital it needed to pay the women up-front for their products. With financing from SOCIALCRED, Asta can now provide a market and income for 53 production groups and in total around 700 women. SOCIALCRED, which was started in 2001 and is now considered the largest microfinance institution in the state of Rio de Janeiro, is a partner of Oikocredit. 

SOCIALCRED aims to generate employment by providing micro and small entrepreneurs and businesses with access to credit. Fashion, health, education and sectors that contribute to environmental conservation are where majority of SOCIALCRED’s clients do business.

By providing capital to organizations like Asta, SOCIALCRED contributes to changing the socioeconomic conditions of people with little or low income.

Oikocredit has been a partner of SOCIALCRED since 2009, providing it with two loans to grow its portfolio.

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