Note

May 08, 20 - 10:37 am - LABS

Credit expansion to Brazil’s small firms via fintechs to be available only at the end of June

Although devised at the end of March, a new line of financing to Brazilian micro, small and medium enterprises during the crisis caused by the pandemic of covid-19 will only be available at the end of June. 

The Brazilian National Development Bank (BNDES) expects that financing will bring more competitiveness to the credit market and, as a consequence, reduce interest rates, because it involves card operators, marketplaces and fintechs, as well as traditional banks.

Brazilian National Bank for Economic and Social Development (BNDES). Photo: Shutterstock

According to Valor EconĂ´mico, a tender was launched by BNDES to receive proposals from the market to create the new investment funds. In May, up to ten partners will be chosen to distribute resources. Only after structuring the funds, at the end of June or at the beginning of July, the money must be available.

In each fund, BNDES will participate with 80% of the shares and private investors with 20%. These funds will hold around BRL 5 billion ($860 million). Investors may include acquirers, POS operators and fintechs, which will also be responsible for originating credit, that is, identifying customers and granting resources, as well as traditional lenders.