Announcing a program to support 500,000 small businesses in favelas across Brazil
On August 30, 2022 Strive Community announced that it will support the digitalization of 500,000 micro-enterprises in favelas across Brazil. The effort will combine training, gamification and mentoring to promote the adoption of digital tools and facilitate access to credit by small businesses.
“Micro enterprises are the backbone of favela communities in Brazil, providing jobs that serve as a critical source of income for millions of people”, said Luz Gomez, Regional Vice President of the Mastercard Center for Inclusive Growth. “By equipping business owners with the right digital tools, we want to enhance their ability to promote inclusive growth where it is needed most”.
This effort will involve three highly skilled and experienced organizations in Brazil. Aliança Empreendedora will bring its substantial experience supporting the digitization of microbusinesses in vulnerable situations. Central Única das Favelas (CUFA) will leverage its unparalleled access to and trust by favela populations, and activate its network of private and institutional partners to maximize the reach and impact of the program. Flourish FI will apply its tried-and-tested technology, which uses behavioral science to develop incentives and nudges that encourage people to build positive money habits and achieve financial security. The work will be supported by Strive Community, a global philanthropic initiative from the Mastercard Center for Inclusive Growth that is focused on strengthening the resilience of 5 million small businesses and supporting their growth.
According to new research from Data Favela and Locomotiva, 41% of the 17.1 million people living in favelas own a business. Their main challenges include limited access to capital, and lack of skills and tools for financial management, pricing strategies, and digital marketing. During the COVID-19 pandemic, many of these small businesses closed or had their revenues drastically reduced as only 23% of them managed to transition their work online.
While this data sheds some light on the challenges and opportunities encountered by small businesses in favelas, there remains a dearth of understanding about their specific experiences. An important part of this initiative will be research into the particular opportunities and barriers faced by microentrepreneurs and micro-enterprise owners in favelas, which will enable tools and services to be designed to address their specific needs. Research findings will be shared publicly to increase the ability of other service providers to meet the needs of this population.
Celso Athayde, founder of CUFA, said “Brazilians are entrepreneurial by nature, and favela-based businesses have tremendous potential to develop. We will use our deep experience in these territories to prepare favela entrepreneurs for digital inclusion.”