It's a casual way to express that something is not a problem or that you're not bothered by it.
Here are some examples of how it can be used:
* "Nao faz mal se eu chegar atrasado?" (It's okay if I arrive late?)
* "Nao faz mal, eu posso esperar." (It's okay, I can wait.)
* "Nao faz mal, eu entendo." (It's okay, I understand.)
The phrase is often used in situations where someone is apologizing for something or making a mistake.
Important: In Brazil, "Nao faz mal" is commonly used, while in Portugal, "Não faz mal" is preferred.