The Brazilian Development Bank (BNDES) has already moved R$ 61.7 billion in the economy to help Brazilian companies overcome the effects of the Covid-19 pandemic. Over the course of 5 months, since the announcement of the first measures at the end of March, this amount has been allocated primarily to micro-, small- and medium-sized enterprises (MSME) – 99% of the 200,000 companies supported. All of these companies employ more than 6 million people.
It is worth mentioning the contribution of the Emergency Credit Access Program (PEAC), which has provided more than 35,000 companies with R$ 30.6 billion in guaranteed credits since its launch on June 30. This amount, which was R$ 20 billion last week, has been growing at an accelerated pace. Currently, 40 financial agents are already qualified to contract secured loans, which can range from R$ 5,000 to R$ 10 million. These institutions are responsible for the final decision to use the program guarantee and evaluate the credit application, at the moment when they structure each of their operations.
In addition to the R$ 61.6 billion allocated to Brazilian companies, another R$ 20 billion was transferred from the PIS-Pasep Fund, managed by BNDES, to the FGTS, allowing individuals to make emergency withdrawals and allocate part of these funds to consumption, which will also help the economy to rebuild and give small businesses a boost. Considering this value, the total of emergency measures implemented by BNDES exceeds the mark of R$ 80 billion.
Positive context – Central Bank data show that, despite the initial expectation of credit retracement due to the economic insecurity generated by the pandemic, there was an increase in the credit operations portfolio for MSME in most economic sectors. Based on the month of July, the variation was positive by 14.8% for large enterprises; 12.9% for medium, 21.7% for small; and 24.1% for microenterprises.
Performance of BNDES emergency lines – The initiatives have been announced since March 22 and seek to preserve jobs and the economic activities of companies during this period, in addition to enabling investments in the health sector. Below is a summary of the measures that are already available:
- BNDES and the Ministry of Economy offered guarantees to more than 35,000 companies through the Emergency Credit Access Program (PEAC), totaling R$ 30.6 billion.
- The Small Business Credit line, which offers credit for working capital, exceeded the initial forecast of R$ 5 billion and has already approved R$ 6.9 billion, supporting more than 21,000 companies.
- The Emergency Employment Support Program (PESE), relaunched last Thursday, August 27, has already approved R$ 4.6 billion in credit since March/April, enabling the payment of wages of more than 1.9 million employees from 114,000 companies.
- The suspension of payments (standstill) to the private sector totaled R$ 12.4 billion, benefiting more than 28,500 MSMEs and 492 large companies.
- With a budget of R$ 4 billion, emergency actions aimed at the public sector totaled R$ 3.9 billion in suspension of payments by states and municipalities. In addition, BNDES accelerated the release of financing contracted by states in the amount of R$ 225 million.
- With 15 other financial institutions, BNDES made R$ 14.84 billion net in the Covid Account, to finance the electricity sector, in order to avoid an immediate increase in tariffs. Of these, R$ 2.7 billion have already been approved.
- Matchfunding Salvando Vidas (Saving Lives), a collective financing action aimed at the purchase of materials, supplies and equipment for santas casas and philanthropic hospitals, raised R$ 73 million (half of this amount injected by BNDES).
- Approvals for the Emergency Support Program to Combat the Coronavirus Pandemic totaled R$ 292 million for the health sector, which are contributing to the opening of up to 2,868 ICU and infirmary beds, and for the acquisition of equipment, such as 1,500 medical follow-up monitors and 4.5 million diagnostic kits.
Measures in the structuring phase for MSME – Aware that a portion of MSME will still need to use credit to resume the economy, BNDES continues to search for new models to finance them. The selection of credit funds to MSME through alternative channels is underway (such as fintechs or digital payment systems), expanding access to financing. BNDES will inject up to R$ 4 billion in funds, in total. In addition, the Crédito Maquininhas program is also being structured, for granting credit to MEIs, micro- and small-sized enterprises, guaranteed by future sales by electronic payment machines. The Federal Government may invest up to R$ 10 billion in the program.
About BNDES – Founded in 1952 and currently linked to the Ministry of Economy, BNDES is the main instrument of the Federal Government to promote long-term investments in the Brazilian economy. Its actions are focused on the socioenvironmental and economic impact in Brazil. The Bank offers special conditions for micro-, small- and medium-sized enterprises, in addition to social investment lines, aimed at education and health, family farming, basic sanitation and urban transport. In crisis situations, the Bank acts in an anticyclical manner and assists in the formulation of solutions for the resumption of economic growth.