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Brazil’s government announced a package of 13 measures on Thursday to ease consumer access to credit and reduce associated costs in the capital and insurance markets, a move the new leftist administration hopes will boost investment and revitalize a slowing economy.
Among the measures is the federal government’s proposal to provide counter-guarantees for public-private partnership projects at the state and municipal levels, the Finance Ministry said in a presentation.
According to Treasury Secretary Rogerio Ceron, the move is expected to mitigate financial and political risks seen by private investors, especially foreign ones, attracting funding for projects such as the construction of daycare centers and sanitation facilities, which are dear to the new government of President Luiz Inacio Lula da Silva.
During a news conference, he announced that the Inter-American Development Bank (IDB) had confirmed the availability of credit lines for operations within this framework, which are also being assessed by development bank BNDES, state-owned Banco do Brasil and other private lenders.
Brazil’s Secretary of Economic Reforms, Marcos Barbosa, said the measures aim to strengthen the credit market in the long term, paving the way for the country’s capital market to become as robust or larger than the 5 trillion reais banking market.
the government will propose a bill so that pension fund resources can be used as collateral for credit operations with financial institutions, lowering the interest rates of loans.
The government also plans to introduce legislation to enhance safeguards for minority investors in the capital market against harm caused by unlawful actions of controlling shareholders and administrators.
SOURCE:REUTERS
