In Rio de Janeiro’s favelas, enterprising residents with their own businesses respond to their neighbors’ needs. In the favela complex of Maré alone, there are over 140,000 residents spread across 17 favelas. Each favela has a range of small and medium-sized businesses located on its main streets, as well as the so-called tendinhas, small shops scattered throughout its lanes and alleyways. Some work alone, trading from their own homes, and have just a sign hanging on their door, seamstresses and shoemakers for example.
This informal trade has a direct impact on Brazil’s economy: Rio’s favela residents circulate R$12.3 billion (around US$3.7 billion) a year according to research by the Popular Data Institute in 2014.
One of these entrepreneurs is Simone Lauar, 40, a vegetarian and resident of Salsa e Merengue who found a way to run her own business and increase her family income while improving people’s quality of life. She cooks and prepares healthy dishes for customers in their homes and sells them at a low price. A lesson shared: she encourages healthy habits because she practices them in her daily life. She lost weight with her lifestyle change and, in parallel, plans to continue expanding her business. “I look for customers and offer cheaper alternatives so that people can eat healthy food without it hurting their wallets,” says Lauar, who has a different work routine to traditional cooks.
As a resident, she does not see difficulties in maintaining her enterprise, which is based on a handmade product, through secret recipes and her fame throughout the neighborhood. Just like Lauar’s service, 3,000 other local businesses operate in Maré. These initiatives generate more than 9,000 jobs for the complex’s residents and other local areas, according to the Census of Economic Enterprises of Maré.
Another informal business that has found success in Maré is Alves Photography, which has already been running for five years despite the young age of its photographer-entrepreneurs: Giselle Alves, 25, and Isabelle Alves, 22. They organize photoshoots for newborns and small children and charge a fair and accessible price. “We take photos with a lot of love and this makes us want to bring our work within everyone’s reach,” the duo reveals.
On this journey, they prove that every dream is built with effort and that risks must be taken to overcome each challenge. “In the beginning it was totally improvised, we only had a few accessories and a wooden board taken from an old piece of furniture, light cables hanging from brooms for lighting, and we already managed to get customers. Every click is another small piece of our dream coming true.”
Transforming challenges into opportunities
According to Fabiana Xavier Ramos, an analyst at Sebrae (Brazilian Service in Support of Micro and Small Businesses), necessity is the main motivation for residents of Maré and other favelas, like City of God, Rocinha, and Complexo do Alemão, to create new enterprises. However “the specific area in which residents will work is related to their abilities and previous experience,” she explains. Ramos observed these trends through the implementation of the ‘Entrepreneurship in Communities’ project, which trains residents of low-income areas in financial management, sales, marketing, and other areas. The program’s activity is defined according to the mapping and perception of where a heated local economy exists, which is historically maintained by necessity and creativity.
The informal sector brings challenges: with self-employment and without regulation from the Consolidation of Labor Laws decree (CLT), there is no holiday pay, overtime, end-of-year bonus, severance pay, or even the right to retirement. However, the current economic crisis has led to a growth in the informal economy. The informal sector ends up being a fundamental economic buffer in moments of crisis.
In addition, the labor reform approved by the Brazilian Congress—and in force since November 2017—has restricted rights and left formal work in a fragile state. Within this scenario, the favela’s entrepreneurial practice, which ceased to be amateurish a long time ago, leaves professionals of the informal sector increasingly distrustful of formal work.
Community journalist Thaís Cavalcante was born and raised in Nova Holanda, one of Maré’s favelas. While working as a community communicator in Maré, she decided to study journalism at university and believes in the power of information to change reality for the better.