The government announced that it will open an emergency line of credit for small and medium-sized companies to finance payroll.
The program will require R$ 40 billion and will be mostly funded by the Treasure Nacional.As such, the president of the Central Bank, Roberto Campos Neto, stated that the program was formulated by the monetary authority, the Ministry of Economy and BNDES.
According to him, the program will be aimed exclusively at small and medium-sized companies, which earn between R$ 360 thousand and R$ 10 million per year and is intended only for payroll financing.According to Campos Neto, the program has the potential to cover about 12 million people and 1.4 million companies.
Small and medium enterprises
Of the amount, R$ 17 billion per month will be financed via Treasury resources, and the rest will come from the banking sector itself. In total, it will be R$ 34 billion from public coffers.
However, people involved in the discussion say that the decision to make the announcement this Friday (27), even without the initiative being ready to be sent to Congress, was political.
However, the government is trying to contain growing criticism about the pace of presenting economic measures against the new coronavirus crisis.”
The program will finance up to two minimum wages per employee. If the person earns more than that, the credit will only cover the established limit, and the company may supplement the remuneration. Every company that accepts will not be able to fire employees for two months. “The money goes straight to the payroll, the company just keeps the debt,” he said.
“Although it will be on a contract [which cannot be fired for two months] and the money will go straight to the employee. So, if he is fired, the company will have to bear the costs and will not receive the resource”, he adds.
The BC stated that the operational arrangement is under discussion, but the BNDES would have the role of transferring the Treasury's resources to the banks.
Therefore, financial institutions will be responsible for granting the credit, with all operating costs. The financing will have a zero spread – that is, the rate of 3.75%. The loan will have a grace period of six months and will be divided into 36 installments. The money goes straight to the employee's CPF.
