Brics Bank lends US$1 billion to Brazil for small and medium-sized companies

The New Development Bank (NDB), also known as the Brics Bank, released this Thursday (12) a loan of US$ 1 billion to Brazil to finance micro, small and medium-sized companies. The resources will be directed to the National Bank for Economic and Social Development (BNDES) and are part of the Emergency Credit Access Program (FGI), created in 2020 to mitigate the effects of the Covid-19 crisis.

The announcement was made by the bank’s president, Dilma Rousseff (PT), after a meeting with Finance Minister Fernando Haddad. The NDB is made up of the countries of the Brics bloc: Brazil, Russia, India, China and South Africa.

Dilma and Haddad met in Morocco, where they attended an International Monetary Fund (IMF) meeting to finalize the loan agreement. The meeting lasted about 20 minutes and was held with open doors.

The credit had already been previously authorized by the Federal Senate in April this year, after the presentation of the draft resolution by the Presidency. The FGI was extended to allow the contracting of new credits until the end of December 2023.

In recent years, Brazil has already received a total of US$6 billion in loans from the bank, destined for various projects, both at the federal and local levels. The most significant amount, US$1.2 billion, was directed to financing sustainable infrastructure projects through BNDES.

On the same day as the meeting between Dilma Rousseff and Fernando Haddad, the minister confirmed that the IMF requested a review of the financial contribution quotas from emerging countries. IMF Director General Kristalina Georgieva is calling on member countries to increase their contributions due to the debt crisis in poorer countries and rising interest rates.

Minister Haddad stated that he will take this request to the Brazilian government for consideration.

Haddad and the president of the Central Bank, Roberto Campos Neto, are in Morocco to participate in the annual meeting of the IMF and the World Bank. Financial contributions from IMF member countries finance interest-free loans to developing countries.

A greater contribution represents greater decision-making power in the Fund. Kristalina Georgieva seeks to increase the organization’s resources, but Haddad highlighted that increasing cash cannot harm the institution’s historical principles, such as proportionality.

“I said that situational issues should not affect this. When you break with a principle that is among the institution’s reasons for being, this organization will lose legitimacy and support in the medium and long term”, stated the minister.