Banks encourage small businesses to export

With the weakness of the real and of the domestic demand, big banks are increasing their efforts to encourage small and medium-sized companies to sell their products abroad. This segment’s exports are still small, but bankers have noticed the beginning of a growth in the number of clients seeking to structure sales in other countries or to boost their international operations.

Banks are focusing on facilitating borrowing abroad, providing the necessary financial services for exporting and giving information and guidance about markets which their clients want to enter. In some cases, banks are even trying to find possible buyers for the Brazilian products among their foreign clients.

They aim to develop their business with a segment of companies that still export little. Even though there are hurdles — such as high taxes and legal insecurity — beginning to export or increasing sales abroad is one alternative to compensate the country’s weak demand and take advantage of a moment in which prices have gained competitiveness because of the devalued real.

Marco Carvalho, president and founder of Toys Talk, company that produces interactive toys, intensified its sales overseas this year to compensate the weaker demand in Brazil. He bolstered exports and today about 85% of its sales come from other countries. Last year, they accounted for only 20%.

“If not for the internationalization, we would honestly be bankrupt. It would be very difficult to recover from this crisis,” Mr. Carvalho says. In 2014, his company had $4 million in sales. For 2016, the projection is $15 million.

Santander, which aided Toys Talk to set up its operation abroad, is trying to help its client to make business in other countries through an online platform called “Trade Portal.” The channel has information of 25,000 companies in 186 countries and through it the bank’s clients in several locations can communicate among themselves. “The client manages to put an information about it and talk to a client in China,” says Ede Viani, head of companies and institutions at Santander. The bank has also been promoting several events to connect companies.

Marlene Milan, executive director of Bradesco, says small businesses need plenty of guidance to structure their sales abroad. “This is the type of client that needs you to teach, take by the hand and shows exactly the way,” she says. “Realizing this, we have been seeking to give specific focus on teaching, guiding and focusing on providing services.” For that, Bradesco mapped the small companies that have already made some transactions abroad and put a representative of the bank in that region. “I have 26 points with the focus of exploring opportunities and guiding clients in their needs, be them of service, collection of letter of credit, foreign exchange,” Ms. Milan says.

The result of these actions is a “timid growth” in the number of small and medium-sized firms exporting, since there are still barriers to overcome, such as legal insecurity, high taxes and the bureaucracy of several procedures. Ms. Milan says the number of exporting companies with revenues below $100,000 grew about 6.6% in the 12 months through July 2015, based on data from the Secretariat of Foreign Trade (Secex). As for the number of larger exporters, with revenues above $100 million, it fell 4.4% in the period.

Vicente Vieira, founding partner of Manifesto Games, an online game developer, says he is managing to expand his firm’s sales in Brazil, but at the same time has been seeking more business abroad to take advantage of the favorable exchange rate. Today, about 60% of its sales come from other countries, and this year the company is likely to have R$2.5 million in revenues, more than twice as much as last year. “With the rise of the dollar we can offer our services at a more competitive price,” he says.

The strong dollar also created opportunities in the opposite direction. Itaú draws attention to the number of foreign companies setting up shop in Brazil. “We see companies entering Brazil today with a long-term view, not only to take advantage of the price opportunity,” says Eneas Ferreira, head of service to multinationals at Itaú. “What we seek to do is to help clients to understand what is happening in Brazil.”

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