Desenrola can negotiate debts of 40 million Brazilians with income of up to R$ 2,600

The Desenrola Brasil program, the flag of the Luiz Inácio Lula da Silva (PT) government to renegotiate debts and boost household consumption, can cover up to 40 million Brazilians who are indebted and have an income of up to two minimum wages (currently equivalent to R$ 2604).

The details of the policy were discussed this week at a meeting between members of the Ministry of Finance and Febraban (Brazilian Federation of Banks). The drawing, however, is not yet closed.

The initiative is one of the bets of the PT government to unlock consumption and stimulate the economy. Today, almost 70 million consumers are negative for default. The level of indebtedness is also a record.

Data from Serasa show that, in October, the value of negative debts reached R$ 301.5 billion, of which R$ 215 billion are outside the banking system. These are debts with electric power concessionaires, water supply and store booklets.

In this universe, around R$ 150 billion are in the hands of 35 million to 40 million Brazilians with an income of up to two minimum wages —the potential public of the new program.

The government’s idea is to create a guarantee fund, with public resources, to serve as a kind of security mattress in the negotiation of these debts. Thus, the expectation is to get the banks to renegotiate the amounts with lower interest rates, with the guarantee that the Union will cover the loss in case of non-payment.

At the other end, creditors will only be able to access the modality if they grant debt discounts. This will be a mandatory condition, although there is still no definition if there will be a minimum percentage of rebate.

The president of Febraban, Isaac Sidney, says that public and private banks are interested in the negotiation. “The equalization of debt has an important social appeal, as it creates conditions to expand the financial inclusion of the most needy, increases consumption and contributes to an expansion of credit operations”, he says.

According to him, Febraban has been dialoguing with the government since the transition to build a program that manages to “de-negative consumers”.

“The challenge is who to reach and what the debts will be. The tendency is that those debtors earn up to two minimum wages, and the debts are those of people’s day-to-day life, such as concessions of public services, credit”, he adds.

Preliminary estimates point out that, to serve this entire public of 40 million Brazilians, the guarantee fund would need to have between R$ 15 billion and R$ 20 billion in resources from the National Treasury. This is because the banks project a higher default, between 25% and 35%, given that the target audience of the measure are consumers who are already negative.

Interlocutors from the economic team heard by the Sheet, however, estimate that the value has not yet been defined, but it will hardly reach R$ 20 billion, given the restrictions in the Budget. At the time of the discussion of the 2023 Budget, there was a forecast to direct around BRL 5 billion to the Desenrola fund.

The default projection is an important factor for this account because the greater the default expectation, the more the fund will be demanded. In this scenario, it could serve as collateral for a smaller volume of loans.

The operational functioning of the program should be as follows. The fund tends to be under the responsibility of Banco do Brasil, which will manage and operate the funds. But the centralization of negotiations must be carried out by the credit bureaus — one of them, Serasa itself.

These institutions are able to have a broader view of consumer debt, including with telephone companies, public service concessionaires or installment plans. Banks, in turn, have a more limited reach and manage to have more accurate information only on debts in the sector itself.

The intention is to provide a website where consumers can consult their debts and show interest in negotiating. From then on, creditor companies will make a discount offer. Whoever offers the highest discount will have preference in the payment queue.

At another end, banks will also make financing offers in the amount necessary to pay off the debt. The same logic applies: the institution offering the lowest interest rate will have preferential access to the program.

Each consumer will have a debt limit to be negotiated by Desenrola. The value, still under discussion, will be calculated after the discounts. That is, if a creditor has BRL 200 to receive, but agrees to settle the invoice for BRL 100 (with a 50% deduction), it is those BRL 100 that count towards the limit.

The program will also have a cut-off date to define which debts can be included in the negotiation.

If Desenrola is launched in the first months of the year, as the government plans, the reference may be December 31, 2022 or January 1, 2023. That is, only debts contracted up to that date would be included in the renegotiation.

“People shouldn’t think that the government has launched Desenrola and can stop paying the electricity bill. Don’t stop, because the program doesn’t go forward, it goes backwards”, warns Sidney, from Febraban.

Desenrola began to be conceived during the electoral campaign. Members of Lula’s team hoped to wave to an important audience: women, the most indebted portion of the population.