Get to know the Lula government’s package to unlock credit – 03/22/2023 – Market

The Lula government is preparing a series of measures to remove obstacles in the credit market in Brazil. For the portfolio, the need for actions is reinforced by the scenario of retraction in concessions amid the judicial recovery of large companies and risks in the international financial system.

The measures will largely require amendments through bills that will be sent to Congress, but some initiatives depend only on the Executive.

This is the case of the changes to make it easier for customers to share data such as Income Tax with banks, which would give institutions more precision about the conditions of the borrower.

“This is very important for microenterprises,” said the person responsible for designing the microeconomic reforms, the Secretary for Economic Reforms at the Ministry of Finance, Marcos Barbosa Pinto, in his first interview in office.

“What is the big problem of microenterprise? There is no reliable data on billing, assets. There is no audit. Where is this data? In Revenue systems”, he says. “We will be able to reduce the transaction cost”, he says.

The portfolio also advocates eliminating the existing interest rate ceiling for loans between individuals – currently restricted to the basic rate (the Selic). For Pinto, the limit hinders the development of me

See what are the measures to be launched for credit and insurance

data access

Make it easier for customers to share their data with the banks –present in the Federal Revenue and Single Registry systems, for example–, to prove their real financial condition and obtain credit with interest appropriate to each situation. It can be done largely by executive branch regulations.

Debentures

Make requirements for issuance more flexible. For example, the need to call a general meeting would be dispensed with (the endorsement could come from the board or the board). As well as the registration of the deed in the board of trade. Requires change in law.

interest ceiling

Government wants to amend the Civil Code to end the existing ceiling for loans between individuals – currently restricted to the basic rate (the Selic). The interpretation is that the limit hinders the development of the capital market and channels resources to traditional banks. Requires change in law.

public banks

Make legal requirements more flexible and waive the presentation of documents, such as proof of being even with electoral obligations. May demand change in law.

debt execution

Bill to accelerate and facilitate the execution of debts by debtors charged in court (in cases outside judicial recovery). Among the solutions under discussion is transferring the administrative part of the execution (such as identification of assets and valuation of values) to lawyers, specialized companies or notaries. Requires change in law.

Framework of guarantees

Government will support the processing of the bill created by the Bolsonaro government and which is in the Senate (it has already passed through the Chamber), but with adjustments (such as reviewing the creation of the guaranteeing institution).

Insurance

Expand the activities of insurance cooperatives, which currently operate on a limited basis, to increase competition in the sector.

unrolls

Program aimed at individuals will allow discounts of up to 95% of negative debts, and refinancing with interest rate limited to 1.99% per month and term of 60 months.