Auxílio Brasil payroll loan will be up to BRL 2,569

Beneficiaries of Auxílio Brasil will be able to borrow up to R$ 2,569.34 in the new payroll loan and pay 24 installments of R$ 160, according to Anefac (National Association of Finance, Administration and Accounting Executives) simulations. The amounts consider a loan calculated on the permanent floor of R$ 400 of the social benefit.

The credit rules were published in the Official Gazette this Tuesday (27), five days before the presidential election, but banks are still not offering the loan. Febraban (Brazilian Federation of Banks) informs that, even in the case of institutions that were already pre-registered with the Ministry of Citizenship, there is no immediate forecast of granting the credit line “due to operational aspects to offer the product”.

Interest is limited to 3.5% per month —51.11% per year—, it will be possible to pay in up to 24 installments and commit up to 40% of the benefit. According to the Ministry of Citizenship, the law 14,431, published on August 3limited the value of the consignment to up to 40% of the minimum permanent value of R$ 400 of the aid.

Banks evaluate rules and are still not offering credit

Banco do Brasil said that, with the publication of the ordinance, it is evaluating the rules required by this regulation to verify the feasibility of operating the line.

The banks Daycoval and Agibank also reported that they are evaluating the rules published by the government.

The banks Itaú, C6, BMG, Bradesco and Santander, in addition to the financial BV, informed that they will not offer the payroll-deductible line of credit to the beneficiaries of Auxílio Brasil.

Crefisa and the banks Mercantil, Safra, Pan, Caixa Econômica Federal and Celetem did not respond until the publication of this text.

Rate is higher than that offered to INSS retirees

Although limited by the government, the rate is higher than that of the INSS (National Social Security Institute), which is up to 2.14% per month. Whoever lends the same amount through the INSS pays R$ 21.99 less per month. In total financing after two years, the difference is R$ 527.76. The monthly installment of those who lend through payroll is R$ 138.01, with interest of 28.93% per year.

See the loan simulations compared to other credits:

The term is 24 months to pay

The amount to be contracted varies according to the interest rate offered by the institution. For interest of 3% per month, for example, the amount released rises to R$ 2,709.69, until reaching R$ 3,204.86 with a rate of 1.5%.

“The lower the interest rate that the bank charges, the greater the amount released, since the installment will remain the same”, explains Miguel José Ribeiro de Oliveira, executive director of studies and research at Anefac.

Experts see debt risk

For specialists, this type of loan is harmful to the public of Auxílio Brasil, which seeks the benefit — from R$ 600 until the end of the year — for subsistence.

Ione Amorim, coordinator of the financial services program at Idec (Brazilian Institute for Consumer Protection), an institution that, together with other bodies, has monitored credit to beneficiaries of Auxílio Brasil since the measure was approved, says that the limitations imposed on credit are not enough and still expose this population to high indebtedness.

“The measures presented establish an interest ceiling, but, in any case, they bring a potential risk, as they are almost twice the rate practiced in other types of payroll-deductible credit, such as the INSS”, he says.

Measure violates the existential minimum law, says Idec

Another point pointed out by her is that the permission to commit 40% of Auxílio Brasil to payroll is against the law that established the existential minimum of R$ 303 per month. When taking out the loan, paying BRL 160 monthly, only BRL 240 remains.

“Five days before the election, this measure is a disrespect to questions of human dignity and only shows that the decisions were taken in a very hasty way, with very shallow studies.”

Ione, however, is not against offering credit to this population. “We cannot deny the right of the vulnerable population to have access to credit, but the conditions show that they [famílias] are being placed in an environment of comfort only for financial institutions.”

The Ministry of Citizenship had informed that there is a list of 17 institutions interested in the credit and pre-registered to offer the new loan, but it has not yet detailed who these institutions are.

Another impediment to offering the line immediately is the rules that impose precautions against indebtedness and preservation of data on aid recipients. Among them are the form of contracting, which can only be in person or over the internet, and not over the phone, prohibition of offering credit to beneficiaries and written authorization of who will contract the loan.

See the main rules published in the Official Gazette

1. The interest rate cannot be higher than 3.5% per month
2. The loan can be made in up to two years, in 24 successive monthly installments.
3. There can be no grace period for the loan to start being deducted from the benefit
4. Banks and finance companies will not be able to charge TAC (Credit Opening Fee) and any other administrative fees
5. The family responsible registered with Auxílio Brasil will need to authorize the loan and the discount on the benefit
6. You will need to authorize the financial institution to have access to personal and banking information
7. Authorization must be in writing or electronically (it will not be accepted over the phone)
8. Banks and finance companies will not be able to call to offer the consignment (any type of active marketing is not allowed)
9. The government cannot be held responsible if the loan is not paid to the bank