Monthly update: January 2021
Dear supporters,
We hope that the new year has started off well for you.
We at Crédito Social began 2021 particularly focused in the design of the business solutions we offer — creating effective financial and inventory management tools for the daily work of the nearly 20 million microbusinesses in Brazil.
As a result of the major administrative and bureaucratic tasks that establishing a business in Brazil required, we found ourselves feeling distanced from the primary problem we are solving. So, this current product development process has been a welcome and gratifying opportunity to reconnect with our small business partners and experience the difference our work makes in their lives.
In a nutshell, we are digitalizing our clients’ books and building dashboards for them to organize, understand, and benefit from their business data.
This process leaves us collecting data on a micro-scale — data that until today have not existed in Brazil, or at least not in a digitalized or centralized form. To understand just how glaring this issue is, though, we need merely review some quick data from the macro scale.
The Brazilian economy is composed of 17 million microbusinesses who:
- Represent 99% of all Brazilian businesses,
- Offer 52% of all jobs, and
- Provide 41% of total payroll nationwide.
The credit market in Brazil as of September 2020 totaled R$3.8 trillion (51% of GDP). Despite microbusinesses representing such a significant portion of Brazilian businesses, the credit pie was divided like this:
Central to our thesis at Crédito Social is that this inequality in credit access is a direct result of insufficient information and financial data on microbusinesses, considering that without such information, banks cannot assess creditworthiness. For this reason, our priority at this stage is guiding microentrepreneurs to organize their information and monitor their businesses.
It is for this reason too that we see such importance and value in the application we are developing to improve microentrepreneurs’ business management. We believe this will serve as a bridge in fact, allowing a financial and inventory management solution on a micro scale to also resolve a problem on the macro scale: lack of access to business credit in Brazil and, who knows, many other emerging economies as well.
This vision is what leads us to seek unparalleled empathy for the microentrepreneur — so that we can provide her/him a personal experience no matter the scale we operate at. This is what will have made our such granular product development process so worth it at all the necessary scales.
Basically, in the last two months, we decided to work exclusively with a small group of clients, immersing ourselves in the micro scale, to discover how to perfect a solution that solves problems not just of individual business owners, but of the global economy as well.
And so, we thank you for your support in this work.
I look forward to sharing detailed results with you soon.
Until then.
Um abraço,
Nathaniel
