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Brazil aims to boost credit for small businesses, real estate loans

Published 04/22/2024, 09:11 AM
Updated 04/22/2024, 09:16 AM
© Reuters. Brazil President Luiz Inacio Lula da Silva reacts during a ceremony to sign the project of the bill to regulate work through ride-hailing apps, at the Planalto Palace in Brasilia, Brazil, March 4, 2024. REUTERS/Ueslei Marcelino/ File photo

BRASILIA (Reuters) - Brazil's government will launch measures on Monday aimed at renegotiating debts and reducing the cost of new loans for small businesses and low-income families, besides establishing a secondary market for real estate credit.

The initiative, previously hinted at by government officials, is in step with efforts by leftist President Luiz Inacio Lula da Silva's government to boost economic activity while improving its popularity, which has been on a downward trajectory in recent polls.

Created through an executive order to be signed by Lula at an event this morning, the "Acredita" program will facilitate the provision of microcredit to those enrolled in CadUnico, the federal government registry enabling access to social programs, including the Bolsa Familia, a welfare cash handout.

The government said in a statement that the program will also enable small businesses to access credit at lower rates and to renegotiate debts under a model similar to that used in the "Desenrola" program for individuals, launched by Lula in 2023 and extended until May this year.

© Reuters. Brazil President Luiz Inacio Lula da Silva reacts during a ceremony to sign the project of the bill to regulate work through ride-hailing apps, at the Planalto Palace in Brasilia, Brazil, March 4, 2024. REUTERS/Ueslei Marcelino/ File photo

Another measure in the government package will create a secondary market for real estate credit, allowing "banks to increase the provision of real estate credit at affordable rates for the middle class."

Simultaneously, the government will publish through the same executive order the legal measures to establish its foreign exchange hedge solutions platform to attract foreign investors, which was announced in February.

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