ANNOUNCEMENT 01 Jun 2020

The Ministry of Economy of Brazil authorized the distribution of up to BRL 20 billion (over USD 3.7 billion) to local SMEs in the form of loan guarantees.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Official Gazette of Brazil. Diário Oficial da União. Órgão: Atos do Poder Executivo. Medida Provisória Nº 975 de 1 de junho de 2020. Available at: http://www.in.gov.br/en/web/dou/-/medida-provisoria-n-975-de-1-de-junho-de-2020-259639759

BNDES News Agency. Agência BNDES de Notícias. "Governo Federal e BNDES oferecerão garantia emergencial para reduzir risco de pequenas em édias empresas" de 02/06/2020. Available at: https://agenciadenoticias.bndes.gov.br/detalhe/noticia/Governo-Federal-e-BNDES-oferecerao-garantia-emergencial-para-reduzir-risco-de-pequenas-e-medias-empresas/

Official Gazette of Brazil. Diário Oficial da União. Lei Nº 14.042, de 19 de agosto de 2020. Available at: https://www.in.gov.br/en/web/dou/-/lei-n-14.042-de-19-de-agosto-de-2020-273219958

Brazilian National Development Bank. Banco Nacional de Desenvolvimento Econômico e Social. Notícias. "BNDES libera parte das garantias do PEAC a grandes empresas mais impactadas" de 6 de outubro de 2020. Available at: https://www.bndes.gov.br/wps/portal/site/home/imprensa/noticias/conteudo/bndes-libera-parte-das-garantias-do-peac-a-grandes-empresas-mais-impactadas/!ut/p/z1/xVRNc5swFPwtOXCU9cKHIb0xCbZb43raxnXg4hEgQK2RiCTb6b_vw_Whk6md6aSZchDD03u7q4WF5vSB5pLtRcOsUJJt8TnLx5v0Zp7M_CWkENz7EN95ob8KE5hHLl0fG-DMFQPNz8_7E6BfaU7zUtretjQrZMXNRkhjhd2VRwUOtKrjDoiu11wa5oBUVpSCGQdKJS3fVcqB4yDZioJrRnqmLScVM6RhmkmLvaRSpOesJIw0WBqa-QBocKtjwhCEZ6VlODTo6UtR0azmdVR4YUTGrl8QH4KQFOMKlzK6LgIvdMMKTue_YFB-2Z71wPc7wvQudSFOgwlMPn2cJrH7vGH53ksgnt2mgZ_Mr6c33qnhAkmGIsPzIj263gt-oCupdIcv_ctfejB7iWHpvpLhBfjgbeHDN4X3_VfCf7iUseETxBC7enG7aBCW2ZYIWSv68C8zgwzi2-NjHmOWh1A-2RP-_w4zetNsVfHrTxbLwovQBM1rrrke7TSWW2t7884BBw6Hw-jIPWrUflRorPQorFfaDtKNsPz8Af6E3yqDPjyHpX236iLvB_n-OTrc123TbRaJF5xu231aL2yQxVdXPwHDASAP/dz/d5/L2dBISEvZ0FBIS9nQSEh/

Inception date: 01 Jun 2020 | Removal date: 31 Dec 2020

Loan guarantee

On 1 June 2020, the Ministry of Economy adopted Provisional Measure No. 975 creating the Emergency Access to Credit Program (i.e. Programa Emergencial de Acesso a Crédito in Portuguese). The new scheme has the objective to facilitate the access to loans to SMEs during the COVID-19 pandemic. 

To achieve its goal, the government via the National Bank for Economic and Social Development of Brazil or BNDES will provide up to BRL 20 billion (over USD 3.7 billion) in loan guarantees until 31 December 2020. After this date, any resources not used will be returned to the Federal Government. 

The program is only open for Brazilian companies that in the calendar year 2019 received gross revenue greater than BRL 360,000 (USD 67,000) and lower than BRL 300 million (USD 55.9 million).

The loan guarantees will only be used to cover exclusively operations contracted under the Emergency Credit Access Program.

Update
On 20 August 2020, Provisional Measure No. 95 was transformed into Law 14.042.

On 6 October 2020, the National Bank for Economic and Social Development (i.e. BNDES by the acronym in Portuguese) announced that from that moment onward, companies with revenues greater than BRL 300 million could also apply for this loan guarantee scheme. 

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