Brazilian Economy Minister foresees new credit program for small and medium enterprises

RIO DE JANEIRO, BRAZIL – In a meeting with representatives of the trade and services sectors, the Minister of Economy, Paulo Guedes, said the government would launch a new credit program aimed at small and medium enterprises, with the potential release of R$100 billion (US$19 billion) in operations, said the president of the Brazilian Association of Bars and Restaurants (Abrasel), Paulo Solmucci.

According to him, at a lunch organized on Wednesday, February 16, by the National Union of Trade and Services Entities, the minister said that the plan might be presented in the coming days.

“Guedes said that a large credit program will be launched next week, on the order of R$100 billion, for companies ranging from Individual Micro-entrepreneur (MEI) to medium-sized companies, with sales of up to R$300 million per year,” he said.

According to a source in the ministry, the plan should be presented in March. Before this, the ministry is still seeking the approval of the measure by the Civil House and a previous alignment with party leaders. The implementation should depend on the edition of a provisional measure by President Jair Bolsonaro.

According to this member of the portfolio that participates in the preparation of the program, the idea is to expand the availability of credit guarantee funds along the lines of the FGO (Guarantee Fund for Operations) and FGI (Guarantee Fund for Investments).

The program would bring together other funds that would serve as guarantees for operations. The evaluation is that obtaining a guarantee to release loans and reduce costs is one of the biggest obstacles for small and medium-sized companies.

“The program will leverage approximately R$100 billion in credit, with several interconnected funds. We will come in heavy with guarantee funds,” said the source, pondering that the amount to be made available in the funds is still being calibrated.

The budgetary cost of the measure is not yet defined, said the source. According to the report, in the funds selected for the program, some resources would return to the Treasury’s coffers, but these funds will be kept where they are to make the guarantees viable.

BNDES should be called upon to manage the funds in the program’s design, just as it currently does with the FGI. The bank Caixa, on the other hand, should operate the part of the program geared explicitly to microentrepreneurs.