WASHINGTON, USA – The State of São Paulo in Brazil will increase productivity and access to private financing for innovation in micro, small, and medium-sized enterprises (MSMEs) with a $195 million loan from the Inter-American Development Bank (IDB).
Its goal is to promote the growth of innovative ventures, increasing financial financial leverage through new financial instruments, and encouraging MSME innovation development by improving credit conditions to stimulate private investment.
This is the second individual operation under the “Brasil Mais Digital” program, a $1 billion Conditional Credit Line for Investment Projects (CCLIP) approved by the IDB in April 2021. It is also the first individual operation in the digital economy sector and the first to be executed by a local development bank: Desenvolve SP, known for its “Banco do Empreendedor” (Entrepreneur’s Bank) corporate brand.
The new program will promote private investment in innovative ventures by developing and implementing new financing instruments to strengthen the early-stage investor base, diversify financing, and leverage public and private resources to share risks through co-investment in funds and other instruments.
It will also seek to increase private investment for innovation and technological adoption in MSMEs through credit lines and processes of guarantee coverage, and promote innovation and technological adoption aimed at 4.0 technologies, environmental sustainability, and climate change.
The population of the State of São Paulo will benefit from the program through support for investment in innovations that improve the quality of life in different areas. The initiative will also directly benefit 3,410 formal innovative companies that use the new financing instruments being promoted.
Additionally, proceeds from the program will help issue 1,400 guarantees for innovation and technological adoption in companies, as well as the design and implementation of a pilot program to support women entrepreneurs who lead early-stage companies.
This operation is in line with Vision 2025 – Reinvesting in the Americas: A Decade of Opportunity, created by the IDB to achieve recovery and inclusive growth in Latin America and the Caribbean, in the areas of small and medium-sized enterprises, digital transformation, promotion of gender equality, and the fight against climate change.
The IDB loan of $195 million has a 25-year maturity, a 6-year grace period, an interest rate based on SOFR, and $120.2 million in parallel financing with local resources.