MICROCAPITAL BRIEF: Natura Cosmeticos' "Cosmetics Microfinance" Project Replacing Criminal Gangs in Brazil?

Projeto Comunidade (Community Project), which was launched by Brazilian cosmetics firm Natura Cosmeticos SA (Natura) in February 2011, is reportedly helping to revive the local economy after illegal drug operations were significantly curtailed by joint police-military operations in Complexo do Alemão, a neighborhood in Rio de Janerio, Brazil. Projeto Comunidade offers non-cash credit to women interested in becoming representatives for Natura. This credit may be redeemed for Natura products that they then must sell within 21 days. As a result of a study conducted by Natura indicating that existing debt was preventing women from working with the cosmetics firm, the maximum debt allowed for new representatives was increased from BRL 200 (USD 125) to BRL 500 (USD 315). The project also allows women who have debts of more than BRL 500 to acquire the products needed to become representatives by paying cash upfront or by borrowing from Santander Microcredito, a for-profit microlending institution. Natura also provides the women financial management courses and training in sales techniques at no charge. Referring to recent police and military actions against drug gangs that had previously held wide influence in the neighborhood, Luis Bueno, Natura's regional director, explained....

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