Brazil

CMN institutes credit to producers affected by rains in the Northeast

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Rural producers and family farmers in the Northeast affected by floods will have access to an emergency line of credit. The measure was approved at an extraordinary meeting of the National Monetary Council (CMN), which also authorized the renegotiation of these farmers’ debts.

The emergency line will be valid for municipalities in the area of ​​operation of the Superintendence of Development of the Northeast (Sudene). The loans will be made with resources from the Constitutional Fund of the Northeast (FNE) and will bear interest of 0.5%, 3.5% or 5% per year, depending on the borrower’s profile. The credit can reach R$ 300 thousand per producer.

Repayment terms are 5 years for cost credit (replacement of lost crops and inputs) and between 5 and 10 years for investment loans (which require repair work and purchase of damaged equipment). Emergency credit can be contracted until June 30. Family farmers will have a 20% discount on each installment paid in full until the due date.

The special renegotiation will cover debts from rural credit operations with FNE resources that were up to date until November 30 of last year and that matured or will mature between December 1, 2021 and December 30, 2022.

Up to 100% of the value of the installments due for investment credit or rural credit for funding extended by the CMN may be paid one year after the end of the current contract. For non-extended cost credit operations, debts may be renegotiated for payment in up to 5 years, with a 12-month grace period (in which the first installment will only be paid after 1 year).

The debit balance of operations with default between December 1st of last year until the date of publication of the CMN resolution must be updated by the financial charges in force in a normal situation;

Aid will only be granted to municipalities that have declared a state of emergency or state of public calamity, recognized by the Executive Power. The losses caused by the floods will need to be certified by the financial institution.

non-rural companies

The CMN also approved an emergency credit line for non-rural companies in the Northeast that had losses from the floods. Operated with FNE funds, it will bear interest of 3.5% per year for micro and small companies and 5% per year for medium and large companies. Each borrower can borrow R$100,000 for working capital and R$200,000 for investments.

The company needs to work in areas of Sudene.

The CMN also instituted an emergency line of credit for urban micro-entrepreneurs, beneficiaries of the National Program for Oriented Productive Microcredit (PNMPO). Each borrower will be able to borrow up to R$ 21 thousand, with interest of 3.5% per year. The operations must have a guarantee, to be carried out by means of a guarantee, surety or fiduciary alienation, individually or jointly. These two lines of credit can also be contracted until June 30, 2022.

Translated to english by RJ983

From Brazil, by EBC News

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