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BNDES Workshop on small and medium enterprises’ access to finance and the role of development banks in Asia and the Pacific and Latin America.

Bangkok, 27-28 September 2017.

Session 4: Improving lending infrastructure for SME financing.

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Aspectos institucionais // Escritórios no Brasil BNDES at a glance

}  Founded on June 20th, 1952

}  100% State-owned company under private law

}  One of the largest development banks in the

world (total assets - US$267.1 billion)

}  Main provider of long-term financing in Brazil

}  Emphasis on financing investment projects

}  Support to micro, small and medium-sized

companies is a BNDES’ strategic priority at the

moment

Rio de Janeiro

Brasília

São Paulo

Recife

Teamof2,791employees(asofMay,2017)

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Aspectos institucionais // Escritórios no Brasil What can be financed

Machine and equipment Working capital and microcredit

Exports Investment projects

Industry and infrastructure Innovation

Social and productive inclusion BNDES Card

Social, environmental, cultural, sports

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Sectors, size and segments supported by DFIs

CDB KfW BNDES KDB JFC CDP CDC ICO

(China) (Germany) (Brazil) (SouthKorea) (Japan) (Italy) (France) (Spain)

Sectors

Agribusiness X X X X

Infrastructure X X X X X X X

Industry X X X X X X X X

TradeandServices X X X X X X

Size SMEs X X X X X X X X

LargeEnterprises X X X X X X X

Segm

ents

Exports X X X X X

InnovaSon X X X X X X X X

GreenEconomy X X X X X X X X

InternaSonalizaSon X X X X X X X X

CapitalMarket X X X X X X X X

InternaSonalFinancialCooperaSon X X X

Source:Ins)tu)onsAnnualReports-2015and2016.

Note:CDB-ChinaDevelopmentBank;KfW-KreditanstaltfürWiederauGau;BNDES-BancoNacionaldeDesenvolvimentoEconômicoeSocial;KDB-KoreaDevelopmentBank;JFC-JapanFinanceCorpora)on;CDP-CassaDeposi)ePres));CDC-Caissedesdépôtsetconsigna)ons;eICO-Ins)tutodeCréditoOficial

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DIRECT OPERATIONS

Financing directly with BNDES

ENTERPRISE

Direct and indirect operations

INDIRECT OPERATIONS

Companies financed through an accredited financial institution

Accredited Financial Institution

ENTERPRISE

Information & Relationship

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Accredited Financial Institutions

}  57 FIs enabled to operate BNDES products:

Captive Finance Companies

Commercial Banks

Development Banks

Cooperative Banks

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NORTH 5.2%

MIDWEST 11.6%

NORTHEAST 12.9%

SOUTHEAST 45.1%

SOUTH 25.3%

BNDES Performance

}  In 2016, BNDES disbursed US$ 27 billion*

}  Disbursments by Economic Sector:

}  Disbursments by Region:

Infrastructure 29%

Trade and Services 34%

Industry 21%

Agribusiness 16%

* Dollar on 30/12/2016 (Ptax) = US$ 3,26

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Participation of SMEs on BNDES Disbursments (%)

Source: BNDES.

22,9%

22,3%

29,9% 31,6%

24,8%

21,7%

24,8%

24,0%

17,5%

27,1%

35,8%

32,1%

33,4%

31,6%

27,5%

30,9%

15%

20%

25%

30%

35%

40%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

SMEs

2010-2016Average:31,2%

2001-2009Average:24,4%

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SMEs

Financial Institution

Challenges and Initiatives

Lack of risk appetite for SMEs

Competition with other financial products

Lack of credit guarantees

Asymmetric information

Long transaction time

BNDES Credit Guarantee Fund

BNDES Online Platform

BNDES SME Portal

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Financial Institution SMEs

BNDES Credit Guarantee Fund

Applies for loan and BNDES Credit

Guarantee Fund Apply for a

loan

Loan disbursed. Credit and Guarantee Warrant Fee

repaid in installments

Loan disbursement

Characteristics

}  Initiated operations in May 2010

}  Total fund leverage up to 12 times its equity value

}  26 financial institutions participants

}  32,751 operations, representing US$ 2.0 billions in credits guaranteed

}  1,023 default payments until now, total sum US$ 37.6 millions (default rate 2.26%)

Limit per beneficiary:

US$ 3.2 million

Ratings accepted: AA to D

Coverage: 20% to 80%

of loan

Lack of credit guarantees

11BNDES SME Portal Tradi)onalNewModel

FinancialInsStuSon MulSpleFinancial

InsStuSons

BNDESSMEPortalGo-LiveinJul-2017

•  Financingrequests:16.717(1)•  Proposalssubmi_ed:37.083(2)

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2 3

4 3

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BNDES Online Platform

Financial Institution

Old Flow

New Flow

SMEs

BNDES SME Portal

SMEs

Manual Interference

Average time of approval: 3 working days

Machine to Machine

Average time of approval: 3

seconds

Financial Institution

BNDES Online

}  New transaction platform: Online

}  Reduces time and costs

}  Automatic surveys on Official Governments´ Database

Thank you!

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BNDES website www.bndes.gov.br Contact Center 0800 702 6337 International calls +55 21 2172 6337 Ombudsman 0800 702 6307 www.bndes.gov.br/ouvidoria Contact us www.bndes.gov.br/faleconosco Tiago Peroba

Peroba@bndes.gov.br +55 21 37478456