Brazilian Development Bank

September, 2009

Venture Capital Division (ACE) and Financial Division / Accountancy Department (AF/DEPCO)

BNDES PRODUCTS FOR SMEs :

BNDES Card (machinery and equipment)

BNDES Automatic (indirect operations up to R$ 10 million)

Specific lines and programs (by sector, cash flow, imports and exports, innovative capital line, technological innovation line etc.)

Capital Market – direct and indirect operations (CRIATEC Fund and Venture Capital Funds);

Technological Fund (FUNTEC);

FGE BNDES (facilitate the access to credit for SMEs)

DISBURSEMENT PER SIZE (%)

NUMBER OF OPERATIONS AND DISBURSEMENT PER SIZE (JAN. – JULY 09)

62.8

5.23.32.7

Micro and Small Medium

Individual Large

94,948

12,498

11,275

67,228

Micro and Small MediumIndividual Large

R$74.1 billion

Number of Operations

185,949

Disbursement

SMEs DISBURSEMENT (JAN. – JUL/2009)

Obs. These charts do not include acquisition of assets.

R$ billion

1.1

4.0 1.2

0.4

4.6

North Northeast South-east

South Center-West

0.4

10.8

Direct Indirect

PER REGION PER OPERATION

TYPE

SMEs DISBURSEMENT (JAN. – JULY 2009)

Obs. These charts do not include acquisition of assets.

R$ billion

2.1

1.3

2.6

5.3

Agrobusiness Industry

Infrastructure Trade and Service

3.3

5.2

2.7

Micro and Small Medium Individual

PER SECTOR PER SIZE

GROWTH CHAIN

SeedCapital

CRIATEC

Private Equity

GovernanceFunds

Secondary Offers

Capital Market

Seed

VentureCapital

9 New Funds

New-bornEnterprises“Start-Ups”

InitiatingEnterprises

“Early Stage”

EmergentEnterprises

MaturedEnterprises

InitialPublicOffer

7 Companies57 Companies13 Funds

29 Companies8 Funds

The range of products seeks to offer proper resources to accelerate the enterprises’ growth cycle:

INFORMATION FROM IBGE AND SEBRAE – SMEs

SMEs generate 60% of formal job vacancies in Brazil (Sebrae -

2002);

They are responsible for 25% of Brazilian GDP (Sebrae – 2002);

They represent 99.7% of the 5.2 million registered enterprises in

Brazil (IBGE – 2006) and more than 95% in the world (OECD –

2004);

They are responsible for 45% of formal job vacancies and 55% of

employed personnel;

SMEs also represent 60% of the salaries paid in Brazil.

NUMBER OF ENTERPRISES IN BRAZIL

Numbers and percentages of enterprises according to size Source: IBGE (2006)

92.1%

0.9%

6.7%0.3%

Micro Small Medium Large

5,273,600

385,343

52,977

15,600

ABOUT BRAZILIAN SMEs

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Micro Small Medium Large

0-9 10-49 50-249 250-more

Enterprises Employees Registered Employees Salaries

Percentage distribution of: number of enterprises, total employees, registered employees and salaries according to the size of the enterprise - Brazil - 2006 Source: IBGE (2006)

* The ranges refer to total employees.

*

PDP – FOUR MACRO-GOALS:

Increase Brazil’s investment rate to 21% of the GDP (17.6%

as of 2007);

Expand private investments in R&D to 0.65% of GDP (0.51%

as of 2005);

Expand Brazil’s role in global trade by achieving 1.25% of

total global exports (1.18% as of 2007); and

Increase the number of micro and small export enterprises

by 10% (11,792 as of 2006).

HOW IMPORTANT IFRS ARE TO SMEs

ADOPTING IFRS LEADS TO THE STRENGTHENING OF CORPORATE GOVERNANCE PRACTICES WHICH ARE ESSENTIAL FOR THE SUSTAINABLE DEVELOPMENT OF THE ENTERPRISE.

• It eliminates repeated work for the accountancy department - Efficiency;

• It reduces the differences found in information provided by different departments - Transparency;

• It allows the comparability between financial statements - Universal Language;

• It increases the reliability of the enterprise - “Accountancy is the language of •business”; and

• It reduces mistakes – Puts an end to the coexistence of parallel rules.

DIRECT EFFECTS:

HOW IMPORTANT IFRS ARE TO SMEs

This eliminates repeated work for the accountancy department - Efficiency; This reduces the differences found in information provided by different departments - Transparency;This allows the comparability between financial statements - Universal Language;This increases the reliability of the enterprise - “Accountancy is the language of business”; andThis reduces mistakes – Puts an end to the coexistence of parallel rules.

It facilitates global relationships for these enterprises through: • retrospective and prospective evaluation of its economic and financial situation by banks, clients and suppliers;

• evaluation of possible investors;

• foreign loans;

• imports and exports (globalization);

• establishment of strategic alliances.

CONSEQUENCES FOR SMEs:

HOW IMPORTANT IFRS ARE TO SMEs

Make easier to the enterprise the: • retrospective and prospective evaluation of its economic and financial situation by banks, clients and suppliers; • evaluation of possible investors;• foreign loans;• imports and exports (globalization);• establishment of strategic alliances.

• It facilitates consolidation of the enterprises’ financial information and increases the effectiveness of public policies applied to SMEs; • It facilitates the capital flow between countries;• It reduces the cost of transactions;• It increases competitiveness;• It stimulates investments;• It simplifies the process to open capital (market liquidity);• It increases the speed at which companies grow;• It increases the generation of employment;• It reduces poverty in the country.

It eliminates repeated work for the accountancy department - Efficiency; It reduces the differences found in information provided by different departments - Transparency;It allows the comparability between balances sheets - Universal Language;It increases the reliability of the enterprise - “Accountancy is the language of business”; andIt reduces mistakes – Puts an end to the coexistence of parallel rules.

CONSEQUENCES FOR BRAZIL:

WHY IFRS SHOULD BE MANDATORY FOR SMEs

• Adhering to international standards is not simple because it deals with beliefs.

• Benefits are not immediately achieved.

• Human beings are, by nature, resistant to change.

THE BNDES’ WEBSITE - www.bndes.gov.br

CALL CENTERS

Rio de Janeiro - (+55 21) 2172-8888

São Paulo - (+55 11) 3512-5100

Brasília - (+55 61) 3214-5600

Recife - (+55 81) 3464-5800

BNDES Card - RJ: (+55 21) 2172-6337 / Others: 0800 702 6337

Indirect Operations: (55 21) 2172-8800

Exports: (55 21) 2172-8566

faleconosco@bndes.gov.br

Ombudsperson: (55 21) 2172-8777

ouvidoria@bndes.gov.br