ANNOUNCED AS TEMPORARYNo
On 23 October 2013, the Brazilian Development Bank BNDES announced a new credit line for the creative sector, called BNDES Prodesign. The fund is worth 500 million real (USD 230 million).
The funds are directed at investments in design, fashion, product development, and branding strategies. Thus, its main beneficiaries are producers of fashion, furniture, personal hygiene goods, perfumes, cosmetics, domestic supplies (including electronics), toys, sanitary metals, jewelry, watches, packaging, and ceramic tiles.
Eligible items are mainly costs related to R&D, packaging, industrial design and fashion design, ergonomy, concepts, comport and style, vocational training, trade fairs, as well as the acquisition of software of national production.
Subsidies and local content requirements
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
The measure is considered discriminatory since, in general, the Brazilian Development Bank provides credits with below-market interest rates only to legal persons (private or public) based in Brazil. BNDES Prodesgin credits have an interest rate of 5.9% plus a risk premium, whereas the Central Banks overnight interest rate is at about 9.4 percent.
Besides this, the bank imposes local content requirements on goods (mainly capital goods), services and software financed through its credit lines.
On 23 June 2015, BNDES extended Prodesign program until 2016. It was supposed run out in December 2015. Also, the bank increased the funds' budget and added new sectors as well as lending requirements to the credit line. Please, consult measure no. 10154 under Related Measures.
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