Guedes promises R$100 billion in credit for small and medium-sized businesses

Written by Bernardo Kram

BRASILIA (Reuters) – In a meeting with representatives of the trade and services sectors, the Minister of Economy said Paulo Geddeshe said that the government will launch a new credit program targeting small and medium-sized companies, with the possibility of launching 100 billion reais into operations, according to the president of the Brazilian Association of Bars and Restaurants (Abrasel), Paulo Solmuschi.

The minister stated at a luncheon organized by the National Union of Trade and Services, Wednesday, that the plan may be presented in the coming days.

“Guedes said that a large credit program will be launched next week, in the range of 100 billion reais, for companies ranging from MEI (individual small entrepreneurs) to medium-sized companies, with revenues of up to 300 million reais annually.” advertiser.

According to a source in the ministry, it is scheduled to postpone the presentation of the plan until next March. Previously, the portfolio was still seeking Civic House approval for the measure, as well as an earlier alliance with party leaders. Implementation must depend on the issuance of a temporary measure by the President of the Republic Jair Bolsonaro.

According to a portfolio member who was involved in preparing the program, the idea is to expand the availability of credit guarantee funds, similar to FGO (Operations Guarantee Fund) and FGI (Investment Guarantee Fund).

The program will collect other funds, which will serve as a guarantee of operations. The assessment is that obtaining guarantees to release loans and reduce costs is one of the biggest obstacles facing small and medium-sized businesses.

The source said, “The program will increase credit by about 100 billion riyals, with several interconnected funds. We will enter heavily with guarantee funds,” considering that the amount that will be saved in the funds is still being calibrated.

The budgetary cost of this measure has not yet been determined, this member of the portfolio said. According to the report, in the funds selected for the program, there are resources that will go back to the treasury coffers, but these funds will be kept where they are to make the guarantees viable.

In program design, BNDES should be set to manage funds, as is currently the case with FGI. Caixa, in turn, should run the portion of the program that specifically targets small business owners.

Sought, the Ministry of Economy did not immediately respond.