Brazil’s government eyes initiatives to boost credit for low-income individuals

By Thomson Reuters Mar 18, 2024 | 2:32 PM

BRASILIA (Reuters) – Brazilian Finance Minister Fernando Haddad presented measures from a credit package that will include microcredit for low-income individuals as part of the next steps in the ministry’s “structural actions and stimulus measures” for the year.

The microcredit will be aimed at those enrolled in CadUnico, a federal government registry that enables access to social programs, including the welfare cash handout Bolsa Familia, which reaches around 21 million families with an average monthly benefit of 685 reais ($136).

The initiative was included in a presentation made by Haddad to President Luiz Inacio Lula da Silva and other ministers earlier on Monday, which was later released to the press.

In the first ministerial meeting of the year, Lula demanded results from the ministers, following opinion polls showing a decline in the popularity of the leftist leader’s government.

Haddad’s presentation also outlined, within the credit package, a debt renegotiation program for small businesses and the securitization of real estate credit.

Among other measures for 2024, the presentation mentioned the review of state debts with the federal government, “linking the savings from debt service to priority social investments.”

Haddad anticipated in the document the possibility of consigned credit – where borrowers agree to have loan payments deducted directly from their paycheck – through a government platform called e-Social, where formal registration of domestic workers is done.

Haddad also mentioned new rules for a government program that grants tax benefits to companies providing meal vouchers to workers.

Lula’s government had postponed last year the regulation of a bill that had been approved by Congress foreseeing the opening of such meal voucher market, including the possibility of credit portability.

($1 = 5.0234 reais)

(Reporting by Marcela Ayres; Editing by Sharon Singleton)