On June 1, Central Bank president Roberto Campos Neto attended a Congressional public hearing and presented the main measures taken by the government to tackle the effects of the pandemic. Although the meeting did not focus on any Legislative proposals, he announced that the idea is to expand credit for businesses.
To access the presentation made by Campos Neto, click here.
During the public hearing, the Central Bank president refuted certain “myths”, saying that the country is not experiencing a retraction in the supply of credit. “Credit is growing much more than the average in emerging markets and far more, in the case of legal entities, than in developed markets having adopted more powerful measures,” he argued.
He added that in crisis scenarios such as this, it is natural for the credit market to follow the economy’s downturn and retreat, but that this is not the case in Brazil because, apparently, the supply of credit for businesses has grown year-on-year by 40% since the beginning of the pandemic.
He also reported that the government will extend credit to businesses needing resources to pay salaries due to the pandemic. Although the original proposal -which has yet to be ratified by Congress- was aimed at helping small and medium-sized businesses, the idea now is to include companies recording annual gross revenues of between R$10 million and R$50 million in 2019.