In November 2014, eight representatives from the Industrial Development Corporation of South Africa (IDC) and the Small Enterprise Finance Agency (SEFA) visited three Brazilian cities to become familiar with local fomenting policies for micro and small enterprisers. This interest in Brazil and its institutions is due to the fact that the Country is a world reference in fomenting enterprising ventures. Micro and small businesses comprise over 95% of the businesses and 27% of the Brazilian Gross Domestic Products (GDP) in the Country. Besides that, these businesses are responsible for generating over half the number of total jobs (52%).
Sebrae was created in 1972, as a private non-profit entity, this acronym means the Brazilian Service for Micro and Small Companies, seeking to promote competiveness and development of micro and small companies actuating and focused oN the process of formalization of the economy, through partnerships with public and private sectors, training programs, tradeshows, and business meetings. It is the main development agent in the country for this purpose; the entity is frequently requested by international institutions for sharing good practices in development and application of management methodologies for small businesses.
SMALL BUSINESSES IN BRAZIL
In the most recent study by Sebrae on company survival that took place in 2013, it revealed that for every one hundred companies created in Brazil, 76 survive their first two years of operation. That was the best survival rate ever recorded — ten years ago, this rate was only 50%. Internationally, these first two years of activity are also pointed out as the most difficult for any company. If we compare the survival rate of companies in Brazil to the study performed by OECD (Organisation for Economic Co-operationand Development), we can see our country is second place in the ranking, tied with Luxemburg. Only Slovenia is more highly rated. “Weare ahead of other countries, such as Canada, Spain, and Portugal”, celebrates Fernanda Maciel Mamar Aragão Carneiro, international consultancy manager of Sebrae.
There are three main factors to guarantee survival of these companies: legislation, scholastic background, and the market. The legal environment has improved a great deal since Brazil created the General Law for Micro and Small Companies and the Super-simple company regime; it defines a type of reduced taxation rates and less bureaucracy, unifying eight taxes on only one payment slip. The result has been the end of informality work for over five million Brazilians. The scholastic level in Brazil has also improved and this exerts a positive impact on enterprisers, who do more planning before starting a business.
FOR EVERY ONE HUNDRED COMPANIES CREATED IN BRAZIL, 76 SURVIVE THEIR FIRST TWO YEARS OF OPERATION
Statutorily, Sebrae cannot provide training outside of the Brazilian territory, so the Inter-American Development Bank (BID) entered into a partnership to enable the sharing of the methodology developed by Sebrae with similar institutions in Latin America and the Caribbean. Up to now ten binational initiatives have taken place (in bordering areas) and 20 methodology transfers to multipliers from other institutions have benefitted over 26 thousand people directly and indirectly.
Sebrae has also developed a virtual platform for free-of-charge know-how sharing, named COPYME, including contents in three languages (Spanish, English and Portuguese) for fomenting institutions as well as small business owners. Thirteen institutions have benefited from the contents of this platform, four of them on the African continent: ADEI (Cape Verde), Boa Vista Municipal Chamber (Cape Verde), INAPEM (Angola) and IPEME (Mozambique).
SIMILAR INITIATIVES IN AFRICA
IPEME — Institute for Promoting Small and Medium Sized Businesses (Mozambique)
This public Mozambican institution encourages the implementation, consolidation, and development of small-sized businesses in Mozambique. PEME was created in 2008, linked to the Industrial and Commercial Ministry, but it deploys autonomy in its administration and financial sectors. See the IPEME website: www.ipeme.gov.mz
ADEI — Business Development and Innovation Agency (Cape Verde) ADEI provides technical support, prepares studies and research, develops and executes programs and projects, gives business training and market access initiatives, and it also promotes initiatives for the creation and enhancement of infrastructures and support services for business activities. See the ADEI website://www.adei.cv.
SEDA — Small Enterprise Development Agency (South Africa)
The Small Enterprise Development Agency (SEDA) was created in 2004 linked to the South African Commercial and Industrial Department (DTI).
RDB — Rwanda Development Board (Ruanda)
The entity is independent and influential, it is directly linked to the presidential cabinet of the Country and integrates a Developmental Council created by the government to facilitate the opening of new businesses. The RDB website is http://www.rdb.rw/
TIC — Tanzania Investment Centre (Tanzania)
The organization was created in 1997 to be the main government agency for coordinating, fomenting, promoting, and facilitating investment in Tanzania and for counseling the Government on an investment policy and related issues. The website for the Center is http://www.tic.co.tz/