Access to Credit: how government measures affect the economy

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Access to Credit: how government measures affect the economy

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The need for social detachment is impacting organizations’ revenues, and emergency government measures are being implemented to minimize the effects on the economy.

In view of this frightening scenario and the constant changes in political decisions, we will address the main measures adopted by the government to support large businessmen, and how these decisions impact access to consumer credit.

If you want to know some tips to optimize your business management in times of crisis, we recommend reading this material here.

Now, follow the post and check, in detail, the main measures adopted, their applications and influences on access to consumer credit. Good reading!

The economic crisis of Covid-19 and companies in the UK

The new coranavirus emerged, and like it people needed to stay at home. Because of this, more than 12.3 million businesses, corresponding to 21.5 million jobs, are being impacted by the crisis, as shown by the mapping of the SEBRAE (UK residents Micro and Small Business Support Service).

Traditional retail, construction, food, fashion, educational services, logistics, transportation, tourism and technology are the sectors most impacted by the Covid-19 pandemic in the UK.

According to the latest update from the Federal Government, made on 04/14, the set of measures announced to give access to consumer credit, together with the resources offered by the three main public banks (BNDES, Caixa Econômica Federal and Banco do Brasil), the amount reaches approximately R $ 867 billion.

The National Monetary Council (CMN) edits rules to ensure the liquidity of the National Financial System, aiming to create conditions for banks to be able to raise new resources and minimize the impacts on the economy.

Federal government measures in the face of the crisis for individuals

In principle, the Central Bank (BC) and the National Monetary Council triggered emergency measures in the country’s financial system, thereby expanding resources and allowing financial institutions to be able to offer access to consumer credit.

Check below the main deliberations announced by the federal government to help individuals at this crucial moment.

Banco do Brasil’s stake

Banco do Brasil (BB) will provide R $ 100 billion to reinforce credit lines for individuals and companies. Of this total, R $ 24 billion will be destined to individuals.

This resource will reinforce the existing lines, mainly those focused on personal credit and working capital.

In addition, to facilitate access to consumer credit, the withdrawal limit can be increased at BB and Banco24Horas ATMs. The customer’s profile will be a differential factor to authorize this transaction.

Participation of Caixa Econômica Federal

Caixa Econômica Federal (CEF) announced significant measures to optimize access to consumer credit.

CDC installment operations (Direct Cash Credit), Personal Credit, Renegotiation and Microcredit may be paused for up to 90 days. With this, the values ​​of the other installments will be changed automatically and the interest for the paused period will be distributed among the other installments.

Pause can also be requested for the financing housing. In this case, up to three installments may be temporarily suspended.

In addition, CEF will allow the renegotiation of debts, installment of the invoice of credit card, TED for savings from other banks, among other benefits.

Emergency income release

Another government measure to provide access to consumer credit was the release of emergency income.

The aid offers R $ 600 for three months to help those who are unemployed, informal workers or Individual Microentrepreneurs (MEI). Under the rules, women who are mothers and heads of households will be entitled to double the amount.

Expansion of payroll-deductible credit lines

Also in relation to CEF’s participation, the payroll-deductible lines of credit will be expanded. This includes the line for retirees and EHIC pensioners with the best rates on the market.

The renewal of payroll loans still has the possibility of a pause for up to 60 days in the payment, and can be carried out at the Internet Banking Caixa (IBC)

Interest rate reduction

Another measure of CEF to facilitate access to consumer credit is the reduction of interest rates on the lines personal credit (payroll deductible from 0.99% pm, pledge from 1.99% pm and CDC from 2.17% pm)

Installment of the credit card invoice Caixa

CEF also benefits the individual customer by reducing the installment fee to 2.90%.

IOF shutdown

Even in the face of these measures to simplify access to consumer credit, the incidence of IOF (Tax on Financial Operations) additional, due to the extension of the total term of the loan, may exist. Therefore, it is essential to consult the situation with the creditor bank.

At this time, the IOF is suspended by the government.

Federal government measures in the face of the crisis for legal entities

Check out some of the new interim rules to facilitate access to credit for the legal consumer.

Suspension of the employment contract, reduced working hours and wages

Temporary suspension of the employee’s contract for up to two months was authorized and the reduction of hours and wages by 25%, 50% and up to 70%, for up to three months.

The affected employees will receive compensation from the government that can reach 100% of the unemployment insurance to which the worker would be entitled in case of dismissal.

Creation of an emergency credit line

To facilitate access to consumer credit, a R $ 40 billion constitutional credit line was released. With it, small and medium-sized companies will be able to finance the payment of employees’ salaries for up to two months.

The financing will be limited to two minimum wages (R $ 2,090) per worker, the interest rate will be 3.75%, without charging the bank spread. There will be a six-month grace period for the beginning of the payment and 36 months (three years) to settle the debt.

To have access to this financing, companies need to have revenues between R $ 360 thousand and R $ 10 million per year.

Alteration of labor rules

The alteration of the labor rules was authorized to regularize teleworking, favoring the use of annual leave and anticipation of vacation, for example.

In addition, the amendment aims at the value of the FGTS (Service Guarantee Fund) referring to March, April and May can be collected from July, without interest, update or penalty. This payment can still be made in up to six installments.

EHIC inclusion

O EHIC (National Institute of Social Security) becomes responsible for the costs of the first 15 days of leave of workers who test positive for Covid-19.

Participation of Caixa Econômica Federal

To simplify access to credit for the legal consumer, the Box will make R $ 154 billion available for working capital, purchase of portfolios, Santas Casas, agriculture and real estate. Micro and small companies will still have a reduction of interest of up to 45% in the working capital lines.

The bank will also offer a break of up to 60 days in the payment of these installments and in the renegotiation of credit agreements, and special lines of credit were created for companies operating in the sectors of commerce and services, and lines of financing for machines and equipment at reduced rates.

Banco do Brasil’s stake

As we said, R $ 100 billion will be offered by the Bank of the UK. Of this total, to optimize access to credit for the legal consumer, R $ 48 billion will be allocated to companies, R $ 25 billion to agribusiness and R $ 3 billion to municipal and state public administrations.

BNDES participation

The BNDES (National Bank for Economic and Social Development), intends to inject R $ 55 billion into the economy to reinforce the companies’ cash flow and support workers, suspend the collection of loans for up to 6 months, create credit lines facilitated for SMEs (Small and Medium Enterprises) and transfer R $ 20 billion from PIS / PASEP to FGTS.

Lending to companies

With uncomplicated access to consumer credit, CMN authorized the central bank to grant loans to financial institutions, with the guarantee of debentures acquired between 3/23 and 4/30.

Flexibility in LCA rules

The measures authorized the flexibilization of the Agribusiness Letters of Credit rules (LCA) by the Central Bank. This will free an additional R $ 2.2 billion of funds for banks, minimizing the impacts of the crisis on the economy

Release of the use of DPGE

Another measure to reduce these repercussions on the economy is the possibility of attracting new resources. Through the Term Deposit with Special Guarantee (DPGE) of the Credit Guarantee Fund (FGC), banks will be able to simplify access to consumer credit.

Creation of a credit line for small businesses

The banks aim to extend up to R $ 6 billion reais in credit to small entrepreneurs and informal professionals. The funds are intended to facilitate access to consumer credit, and are offered by the Northern Constitutional Funds (FNO), from northeast (FNE) and the Midwest (FCO).

Extension of payment of costing credit and rural investment

The CMN authorized the institutions to extend the payment of funding and investment credit to rural producers, in cases where their activities have been affected by social distance.

Extension of the deadline for payment of federal taxes

For large companies, one of the decisions with the greatest impact on the economy was postponing the payment of social security contributions, PIS (Social Integration Program) / Pasesp (Program for the Formation of the Civil Servants’ Patrimony) and Confins (Contribution to the Financing of Social Security), for the months of March and April.

This extension may represent a breath of R $ 80 billion for the organizations’ cash flow.

Suspension of charges by PGFN

The Office of the Attorney General of the National Treasury (PGFN) suspended the collection of active debt and facilitated the renegotiation of charges and access to consumer credit, offering the possibility of payment in installments and longer payment terms (last business day in June). Such a suspension should generate significant results.

The moment of crisis, which the new coronavirus pandemic has brought to the world economy, requires more than ever the ability to management of entrepreneurs. Those who master the cost structures of their businesses and do a good job financial control they will have a better chance of surviving this period of turbulence.

The measures announced to facilitate access to consumer credit should be studied in depth. Thus, the best options and conditions to manage the demands of your financial situation can be used.

Do you still have any doubts regarding the granting of credit in this period of crisis? Leave it here in the comments for us. Our team will be happy to help you!


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