Publications
Publications
- October 2024
- HBS Case Collection
Estímulo: Blended Finance in Brazil
By: Vikram S. Gandhi, James Barnett, Maxim Pike Harrell and Marina Osborn
Abstract
In December 2022, Estímulo—a Brazilian impact investment fund supporting small businesses—found itself at a crossroads. The fund was established in 2020 to provide emergency relief through accessible credit and financial education. When low default rates from borrowers and strong financial performance encouraged Estímulo to continue operating beyond the economic emergency of the pandemic, the fund implemented a blended finance model. Introduced in 2021, Estímulo’s blended model combined philanthropic donations with private capital seeking financial returns and social impact. Through 2022, default rates increased, as did the cost of capital in Brazil. Estímulo new CEO, Vinicius Poit, weighed different options for the fund’s future to balance changes to the blended model with opportunities to expand impact for small businesses across Brazil. The case enables a discussion around alternative financing structures such as blended finance in a country-specific context.
Keywords
Credit; Financial Management; Financing and Loans; Investment; Social Enterprise; Business Model; Financial Services Industry; Brazil; South America; Latin America
Citation
Gandhi, Vikram S., James Barnett, Maxim Pike Harrell, and Marina Osborn. "Estímulo: Blended Finance in Brazil." Harvard Business School Case 325-016, October 2024.