Like it or not, favelas (or slums in English) are still a reality in Brazil. However, a ‘favela’ isn’t what we used to think it is. In a recent article published by Brazilian newspaper Folha de Sao Paulo, a study by Data Popular with focus on favelas showed that the percentage of people living in the favelas with an income of R$5,000 or above per month (USD 1,600) went from 3% in 2013 to 7% in 2015. It doesn’t seem a lot if you convert it to USD but it’s a considerable amount of money and it’s enough to classify them as socio-economic class A /B.

Entrepreneurial Spirit

But who are they? How did they become a high income group? It is highly due to their entrepreneurial spirit: according to the study they are the bakery and grocery stores owners, or have a bottled water distribution business (it’s common for households to use 20 litre water bottles at home).

Results of the study are showing that one in four people want to become entrepreneurs, 55% are planning to open their own business in the next three years. Unsurprisingly, 63% of them think that the best place for them to open their new business would be in the favela.

Access to Wifi

Internet cafes or LAN Houses – as they are known in Brazil  – are one of the main accesses to internet in the favelas. A quick walk around Rocinha, one of the biggest favelas in the world, you could count around 130 Lan-houses, maybe the number could be 3 times bigger than that.

Still going into the entrepreneurial spirit, the LAN House phenomenon is consequence of a federal government programme called “Computers for All”. The programme, created credit lines that would allow low-income families to buy computers paying in small instalments every month for a few years (something like US$25 per month).

The result was remarkable and small-time entrepreneurs would buy a handful of computers, and open a shop for people to play games. Soon, they would contract a broadband connection, and the rest is history. And Lan-house owners usually have no complaints about their business. Charging from US$ 0.40 to $ 1.50 for each hour surfing the web (or playing online games), their shops are full of customers.

Being resourceful

But, where does the entrepreneurial spirit come from? Well, I think it comes from a series of factors, and all boils down to our basic survival instinct. Life is hard in Brazil despite the recent economic growth, and it’s even harder in the favelas. The estate does not offer any welfare benefits programme apart from the Bolsa Familia – which was only introduced in 2003.  So, where do you turn to make ends meet? Not everybody there turn to criminality, on the contrary, they are families who want to have a better life through their own efforts. And that where resourcefulness comes in: if there isn’t an opportunity out there you create your own.

Image: “Rocinha road 2010” by chensiyuan – chensiyuan. Licensed under GFDL via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Rocinha_road_2010.JPG#mediaviewer/File:Rocinha_road_2010.JPG

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