Alagoas Development Agency: Agência Desenvolve

Antonio Carlos Sampaio Quintiliano, Manager of Agência Desenvolve (Alagoas Development Agency)
Agência Desenvolve is a financial institution authorized and supervised by the Central Bank of Brazil owned by the State of Alagoas. Antonio Carlos Sampaio Quintiliano, its Manager, presents the Development Agency.

Interview with Antonio Carlos Sampaio Quintiliano, Manager of Agência Desenvolve (Alagoas Development Agency)

Antonio Quintiliano

What is the role of the Agência Desenvolve?

We work exactly where traditional banks do not operate. We have a totally different way of doing business: when people come to us and don’t know how to make a business plan, we help them to do it or we do it ourselves; we are able to grant credit faster.

When we assumed the government, there was a governmental strategy to make a heavy tax adjustment in the state – the entire Alagoas state had to be completely adjusted so that it could get the money to survive and to invest. We were the first state in Brazil to be authorized by the National Treasury to perform international credit operations. We started with the World Bank in 2009.

We’ve created the Development Agency because it would be a company that would fit perfectly to this whole situation, because one of the government’s goals was to support the formalization of the economy and to heavily support small companies – the number of employment created by the small companies is impressive. As a small state, Alagoas can’t wait that big companies come to the state and generate income: if it happens, they are very welcome, but we have to bet on these small companies for the time being.

Big states and their Development Agencies are betting on huge investments but our model is different. As a small state with a rate of 40% of poor population, our model is based on the following: to support formalization, to help in the qualification process of small companies, so that they generate employment and income. The generation of employment and income is the main strategy of this government, which results in development.

What is the relationship you maintain with international institutions?

It’s very good. We were born with the support from the Inter-American Development Bank (IDB) It took 1.5 years to establish our Development Agency: we created an Executive Board with experts from all over the world that worked hard to come up with the best possible Agency model for the state of Alagoas. We had experts from IDB, the World Bank, some new technology institutions (mainly from Italy). These were the experts that helped create the Development Agency.

Desenvolve Alagoas

When we opened the Agency, everything was perfect; we just didn’t have money. How can you open a financial institution without money? That’s when we called for the Inter-American Development Bank and the Spanish Development Agency – that played a fundamental role in the creation of our own Development Agency. These institutions were our first partners and they still continue to be our partners: they are the ones that make possible the development of projects for the poorest in our society and the results are not economic but social: the state couldn’t finance these resources that would be non-reimbursable funds, so the partnership with these institutions is the most important thing we have.

If a foreign investor would like to benefit from a credit line within your company to open a medium size company (hotel or other), would that be possible?

Yes, of course. From the moment the company is opened in our state it has the right to withdraw a production credit in our agency. What we can’t do is to act outside the bounds of Alagoas, because the law does not allow it. We are only allowed to operate in our state.

We have regions here with beautiful and high quality charming lodges, which are places favored as honeymoon destination for many couples. We have some projects to help these lodges survive the low season, while they prepare themselves for the high season. If they need bed lines, table cloths etc., we lend them the money and they pay us when they have the means to pay us back (once they have increased occupation).

Is it easy to get that credit or is it difficult or bureaucratic?

We work exactly where traditional banks do not operate. We have a totally different way of doing business: when people come to us and don’t know how to make a business plan, we help them to do it or we do it ourselves; we are able to grant credit faster. When someone asks for credit, our personnel goes to the place, takes photos of it, notes what is needed and when they come back the plan is there, available for them.

So the ease and speed for the release of credit is also a differential?

Yes. The bureaucracy is all concentrated here, the time that I need in order to approve an amount of credit is less than the time a bank needs, and we deposit the money in the client’s bank account. Normally, when you ask for a bank credit, you have to have an account opened in that particular bank. In our case, people arrive here with nothing and we can even open a bank account for the entrepreneur.

Do small and micro companies know Agência Desenvolve well?

Alagoas Development Agency

No, not yet. Our company was born in 2009 and we started operating in the market in 2010. 2012 is the third year of our operation. We have numbers that show a growth in the number of operations: we had a 6% growth in the first half in relation to the same period of the previous year.

We are looking for all kinds of partnerships mainly with the state structure: Department of Planning, Secretariat of Economic Development, Innovation and Technology. We work a lot with innovation. All projects we promote or finance are innovative projects.

For example, we had a company that asked for credit to buy a machine to wash their orange production and it was given the money, but when they found out the charge for the transportation (delivery) of that machine, they didn’t have the money for it and they came to us. No bank would do that, but we lend them the money needed for the transport.

Last year we launched a program, where we got money from the BNDES and from the state government launching a public notice for projects just for cooperatives with very low income. These were projects with a limit of 300,000 Brazilian Reals (non-debt generating). Part of that money is being spent on institutional development.

In 2 or 3 years what would be your goal for Agência Desenvolve, the state and the companies within the state?

My mandate ends in 2015, so I can foresee until this point. We need to attract investments and I won’t be able to get the money just from the state’s treasury because I’m competing with all other projects in the state of Alagoas. One of our strategies is to look for private investors to become our partners. The development and the social projects are so expensive that we really need to attract investment. One of my main goals is also to be able to get a credit line from the BNDES. I would like to be able to finance the projects through them.

Are you just thinking at a national level when you speak about private investors?

No. We already made a roadshow in Europe, mainly in Italy and Spain, and we are going to do others soon. We intend to attract some international partners which are connected to this type of financing (development agencies).

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