BNDES Announces R$55 Billion Injection into Brazilian Economy

RIO DE JANEIRO, BRAZIL – Brazil’s National Bank of Economic and Social Development (BNDES) has announced that it will inject R$55 (US$11) billion into the economy. According to the Bank’s chairman Gustavo Montezano, the amount represents virtually the entire bank’s outlay last year.

The credit limit per beneficiary will increase from R$10 million to R$70 million per year, in an attempt to boost companies’ working capital. In addition, R$5 billion will be offered as quick support to micro- and small-sized businesses.

Another action is the expansion of the BNDES Small Business Credit line, increasing the supply of capital for companies with annual revenues of up to R$300 million.

BNDES also announced that it will suspend the payment of loans contracted with the bank for up to six months, in both direct (a total of R$19 million) and indirect (equivalent to R$11 billion) financing for companies affected by the coronavirus crisis.

Speaking during the announcement, President Jair Bolsonaro said that BNDES will transfer R$20 billion from the PIS-PASEP fund (social contributions collected by companies) into the FGTS (Severance Premium Reserve Fund). The government’s idea is to increase the number of allowable withdrawals for workers.

The federal government’s two other financial institutions, Banco do Brasil (Bank of Brazil) and Caixa Economica Federal (Federal Savings Bank), had previously announced other measures to mitigate the effects of the coronavirus on the Brazilian economy.

Source: Infomoney