The number of micro and small businesses (MSEs) under court protection in judicial recovery processes reached 2,821 in June, representing a jump of 41.4% compared to the same month the previous year. This growth is almost double the rate recorded by the group of medium and large companies in the country, which had an advance of 21.2% in the period, according to the Monitor RGF-BizDoc survey. Most of the processes are concentrated in the commerce sector.
In the first half of the year combined, the advance in judicial recovery processes was 18.3% among micro-enterprises and 11.2% in small businesses, against only 8% of the country's general rate. The data demonstrates that the wave of judicial recoveries is reaching smaller businesses at a faster pace.
The backdrop of this situation involves the interest rate kept at high levels for a long period, which makes credit more expensive and compromises companies' cash flow. There is also the negative effect coming from the decline in consumption, given the high indebtedness of Brazilian families.
Two aggravating factors differentiate the situation of small businesses compared to medium and large companies. First, small businesses tend to have a family character, with poorly professionalized management. Second, these companies have less capitalization, which leaves them more vulnerable during moments of economic crisis.
