BNDES: R$ 100 billion to MEIs and MSMEs in FGI Peac – 09/29/2024 – Market

The BNDES (National Bank for Economic and Social Development) states that it will make available, from Tuesday (1st), R$ 100 billion to MEIs (individual micro-entrepreneurs) and MSMEs (micro, small and medium-sized companies) through FGI Peac ( Emergency Credit Access Program).

FGI Peac is not a line of credit, but a bank guarantee program that seeks to reduce the risk of default for financial institutions that lend resources to companies.

In a note about the announcement, BNDES estimates that more than 200,000 operations could be approved in the next 18 months. The institution declares that the measure does not involve new disbursements from the Union.

According to the bank, financial engineering made it possible to leverage the R$100 billion from resources that were not previously used in the program.

“They result from low default rates (5.7% until September 2024), lower than the limit foreseen in operations contracted in 2020. That year, when the program was launched, the default coverage limit was 20% for average and large companies and 30% for small companies”, states BNDES.

The bank says that, based on the “good performance” of FGI Peac, almost half of the 40 financial agents that contracted guarantees from the program in 2020 opted to waive around R$9 billion in coverage limits, which would have enabled leverage of R$100 billion.

Also according to BNDES, a regulatory change allowed the “recycling” of unused resources. With the announced measure, the bank plans to generate a volume of credit in the economy of more than R$30 billion in the last quarter of 2024.

“The good financial and credit management of FGI Peac’s assets by BNDES guaranteed, without new contributions from the National Treasury, a volume of R$42 billion in leveraged credit in 2023 and R$21 billion by August 2024”, said the president from BNDES, Aloizio Mercadante, also in a note.

“Around 70% of the operations carried out by the guarantee program are with micro and small companies, the main segment that generates employment and income in the country and a priority for President Lula’s government”, added the PT member.

For MSMEs alone, through FGI Peac, 335 thousand operations were approved with a total value of R$160 billion between 2020 and 2024, says BNDES.

According to the bank, to access credit, the entrepreneur must look for one of the more than 40 financial institutions authorized to operate the program. The list and more information about FGI Peac are available on the BNDES website.

In his third term, Lula defends strengthening the bank’s role as a financier of projects in different sectors of the economy, including industry.

This strategy is usually viewed with reservations by a group of economists who fear the return of policies adopted by PT governments in the past.

The current BNDES management, however, has already refuted the criticism on more than one occasion, saying, for example, that it targets segments such as smaller companies, innovation and energy transition.