6
Micro-insurance in CCMs, between informality and formality
In Heliópolis it is possible to establish a pattern for the introduction of micro-insurance through types of commerce and services, based on an analysis of the shopping centers observed in the Nodes and the Composite Commercial Microcenters (CCMs). Some economic activities are predominant in the CCMs and can perfectly be linked to insurance products by means of associating these products to the nature of the services. In the CCMs, bars, small markets, food stands, hair salons, points of sale for home to home cleaning materials, taylor and alteration services, are the most common types of businesses and services. Within the Nodes are concentrated businesses and services rarely found inside the favela, such as supermarkets, florists, optical services, banks, lottery outlets, gas stations, pharmacies, furniture stores, clothing stores, shipping services, computer IT stores and dentists.
A way of understanding the manifestation of the distribution of micro-insurance within the spatial conformation of the businesses can be associated to the concepts of formality and informality; there is an invisible line that separates the formal and informal commerce. In this case, the formal commerce would be the business with physical structure, documentation and recognition of the public authority to operate. Many commercial points found in the Nodes near Heliópolis are 'formally' established. Which does not occur inside, in the CCMs, where commerce is quite informal, noticeable by the improvisation of points of sale, often operating from small doors in front of the homes, or by the indirect sale of handcrafted products, such as cleaning materials and taylor and alteration services.
Most of Heliópolis is still in the process of municipal regularization. Obtaining documents to formalize and legalize businesses depends on property deeds that prove the frequent possession of the land, which generally is not possible. Because of that, the access to certificates, such as the National Taxpayer Registry (CNPJ), is very difficult to find in Heliópolis.
Two criteria to evaluate the formality of a business clearly emerged from this finding: its structural conformation and its legal status. Therefore, what indicates total formality are the possession of documents related to the regularization of the business and the physical structure which can be inferred by the appearance of the business (lighting, facade, finishing and signage), besides the presence of electronic methods of payment (credit and debit cards) and mobile phone recharging and transportation systems. These last elements are indicators of recognition of formality of the business by the corporations that provide these services (MasterCard, Visa, SPTrans, Oi, Vivo, among others).
To identify a type of business that exhibits certain structural formality by having its legal status about to be regularized, which may lead to a category of “formal”, the term "Business of Intermediate Formality" was created. But it is the absence of legal regularization and the presence of a precarious physical structure which characterizes “Informal Commerce”.
Another parameter used, this time to observe the "personality" and "impersonality" of the commercial relations, was the forms of payment offered by local businesses. Obviously Nodes offer impersonal forms of payment, such as payment in cash or with credit and debit cards. But in the CCMs, in addition to cash payments, it offered in various degrees the practice of "customer credit". This practice is, by itself, a degree of personal interaction in commercial relations, where "customer credit is only given to people who is well known". The "institutionalization" of the practice not only derives from the absence or impossibility of implementation of other methods of payment, as situations were verified in which the possibility of payment with credit card existed, and still the practice of giving “customer credit" persisted.
During the study of food companies that supply to the businesses in Heliópolis it was observed the way in which the distribution of products was made for businesses, shedding light on some facts related to the formality and informality that occurs in the favela. It was possible to observe the relationship that these large companies had established with the merchants of Heliópolis and understand that this dynamic was built on an informal and very personal door to door contact, knowing the customers personally; creating a relationship of proximity and sociability at the discretion of the employees in charge of those business relationships, which normally does not occur in neighborhoods. Establishing social contact, according to these employees, it is so simple, it only takes for them to go around the streets and passages of the locality.
An important distributor which has operated in the area for eight years serves about 80 small businesses or grocery stores, supplying non-perishable products. And no documentation is necessary for the business to receive products directly from the factory. Usually only a registry of the person in charge of the business is required, no matter if the business is located at the far end of a garage or in a commercial property. These type of companies have much more interest in keeping small businesses because of the consumer potential which Heliópolis possesses.
This form of business gained dynamism as of the year 2000 with the introduction of representatives from different companies to Heliópolis. Transactions between local merchants and companies occurred through checks that had to be cancelled monthly, and it mandated a minimum order of products which required to be negotiated in advance to justify their presence in the locality. Delinquency cases were very rare, especially when there was little movement, which generated insufficient income to cancel the debt. However, the debts were always paid, no matter if a month or two late.
Prices in Heliópolis are hardly under the market value average. But in the case of grocery stores chains, for example, the greater the quantities of merchandise purchased, the lesser the cost provided by distributors. That way, bigger buyers gained the same merchandise as small businesses, but at a lower cost.
That did not happen in Heliópolis’ grocery stores, because they could not sell the enough merchandise, therefore they could not buy them in greater amounts. For that reason, prices in small markets were higher than those found at the big grocery stores established in the Nodes. Only in CCM Alegría lower prices were found, specifically in grocery stores that are part of a large chain, both in relation to other CCMs as well as to nearby Nodes. A major difficulty for merchants in Heliópolis is to obtain the National Taxpayer Registry (CNPJ). The owner of a small market said that in order to obtain the registry and open a folio it was necessary for his accountant to “find a way” with bureaucracy. Because of it, despite having an advantage by buying wholesale merchandise at lower prices, the practice not always guaranteed profit, therefore not having legal documentation to gain access to that type of business is not seen as a problem among the merchants of Heliópolis.
Commerce in Heliópolis.
During our field study in Heliópolis, we surveyed 508 businesses, distributed in six CCMs. Close to one-third of them (34%) were considered intermediate, in other words, businesses that are in between informality and formality. The rest of the businesses (66%) were considered informal. It is important to note that the distribution of different types of commerce varies in each CCM: At Hospital Heliópolis and Florestal there is balance between informal and intermediate businesses; in Comandante Taylor intermediate commerce is predominant, and as far as the CCMs Mina, Alegría and Cônego, denser, informal commerce is predominant.
Although the CCMs closest to the Node Estrada das Lágrimas are Cônego, Mina and Florestal, there is no indication of propagation of formal commerce associated with the CCM Mina, where the only bank in the favela and the UNAS is located, has 98 informal businesses, against 32 intermediate ones. In the case of Rua da Mina, although considered a primary CCM (given the high concentration of commerce; its proximity to the Node Estrada das Lágrimas and for being known as the political center of Heliópolis) its political and commercial “centrality” does not guarantee a greater level of formality. The proximity between Nodes and CCMs does not imply the establishment of more formal and impersonal relations between merchants and consumers either, a common scenario in large shopping centers.
On the other hand, areas more distant to the Nodes and with a lower commercial density, such as Rua Comandante Taylor or towards the end of Alegría, present a significant concentration of formal businesses (or intermediate), which, in principle, contradicts the relationship of dynamism expected for CCMs areas more distant to the Nodes.
Either way, it is possible to identify the pattern expected for the dynamics between Node and CCM in some sectors: areas in proximity to Nodes, such as Rua 28 de Março, Rua Castelo dos Sonhos and Rua Coronel Silva Castro, present more formal businesses, while in more distant areas, such as Rua da Alegría and Rua Barão do Rio da Prata, more informality exists.
All streets in Heliópolis, including the roads surrounding the CCMs, possess some kind of commerce that can be used to distribute micro-insurance. Therefore, although in lesser quantity, it is possible to find, throughout the area, businesses such as small markets and beauty salons, as well as other services such as nail salons, taylor and alterations services, and locksmiths.
The six areas of Heliópolis identified as Composite Commercial Microcenters (CCM Alegría, Cônego, Florestal, Hospital, Mina and Taylor) concentrate the commercial activity in the area as a whole. That does not mean that there is no commerce in the streets and passages outside of these microcenters, but it indicates that businesses in these areas are less relevant in terms of circulation and size in relation to the commercial activity of the microcenters located in longer streets with transit of vehicles. It is worth mentioning that passages are slowly decreasing, due to the evictions done by the municipality or because they are being shut down by the residents themselves, due to security issues, preventing the transit of vehicles.
Two areas in the limits of the locality of Heliópolis display how the distribution of micro-insurance between the passages and the CCMs may be. One of them is next to the southern limit of the locality, area adjacent to the Sabesp. There you find somewhat precarious housing in some roads and in passages in close proximity, such as the "Travessa Dos", there are bigger houses with beautiful facades, as well as nice cars in the driveways (sometimes, more than one car per home). Those passages, both with nice or precarious housing are located around CCM Mina. The other area is located near the Sacomã Terminal, between Glebas A and N. The area is known as Pakistan and the presence of drug trafficking is intense. In addition to the housing projects, there are more rustic houses and also upscale homes, even though many streets are close to the Estrada das Lágrimas and the Sacomã Terminal. In terms of commerce, the so called "Pakistan" does not differ much from the southern area of the locality (Sabesp). Both Pakistan and the area of Sabesp have paved roads and water and electricity, as well as a sewer system. The predominant type of commerce in both areas is informal, being basically composed of bars, small markets, hair salons and produce stands.
The two described areas, however, may be considered as marginal in terms of concentration of commerce if they are compared to the CCMs, although they are both located relatively close to the Node (in the case of Pakistan) and the CCM Mina (in the case of land next to the Sabesp).
It was observed that in those areas outside of the Nodes and CCMs, a smaller variety of types of commerce exists, nearly all informal. However, in the same way we cannot establish the direct relation between the proximity to the Node and formality, it is also not possible to conclude whether there are marginal areas - more precarious in terms of urbanization - inside Heliópolis because of the distance to the Node and the CCMs.
CCM Mina is the one that concentrates the most informal businesses, but the presence of institutions that prove the intervention of an urbanization project of Heliópolis - such as the Polo Cultural Heliópolis, ETEC de Heliópolis, and the Instituto Bacarelli - in the adjacent area (around the southern end of Heliópolis), can be related to the better living conditions found in passages next to Rua da União. Therefore, before considering a direct relationship between CCM, formality, urbanization and distribution of micro-insurance, it is important to take into account that there are diffuse manifestations of those aspects within the sub-areas of Heliópolis, which not necessarily establish this type of correlation, as it was verified at the time of the research.
The data gathered about the six CCMs and the two identified Nodes in Heliópolis allowed for the development of patterns of influence between them, or the influence of the Nodes in the CCMs, the first taken as developing areas characterized by the formality of their commerce. A deeper analysis of each one of these agglomerations can generate more accurate information about the dynamics of the local commerce, shortly influenced by the specificities of each configuration.