The government announced that it will open an emergency credit line for small and medium-sized companies to finance payroll.
The program will require R$ 40 billion and will be financed mostly by Treasure National. Therefore, the president of the Central Bank, Roberto Campos Neto, stated that the program was formulated by the monetary authority, the Ministry of Economy and the BNDES.
According to him, the program will be exclusively aimed at small and medium-sized companies, which have a turnover 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 benefit around 12 million people and 1.4 million companies.
Small and medium-sized companies
Of this amount, R$17 billion per month will be financed by Treasury resources, with the remainder coming from the banking sector itself. In total, R$34 billion will come 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 introducing economic measures to combat the new coronavirus crisis.”
The program will finance up to two minimum wages per employee. If the employee earns more than this, the credit will only cover the established limit, with the company being able to supplement the remuneration. Any company that accepts the program will not be able to lay off employees for two months. "The money goes directly to the payroll; the company is left with only the debt," he said.
"Although it's stated in the contract [that there can be no layoffs for two months] and the money goes directly to the employee, if they're laid off, the company will have to bear the costs and won't receive the funds," he adds.
The Central Bank stated that the operational arrangement is under discussion, but the BNDES would be responsible for transferring Treasury resources to the banks.
Therefore, financial institutions will be responsible for granting the loan, including all operating costs. The financing will have a zero spread—that is, a rate of 3.75%. The loan will have a six-month grace period and will be divided into 36 installments. The funds will be credited directly to the employee's CPF.