MP that creates credit program for small businesses goes to sanction

This Monday (8), the Chamber of Deputies approved a provisional measure that creates a credit stimulus program to benefit small producers and entrepreneurs, with gross income of up to R$ 4.8 million per year.

The proposal was symbolically approved by the deputies and is going to be sanctioned or vetoed by President Jair Bolsonaro (no party).

The provisional measure sent by the Planalto Palace provides that banking institutions grant credit under favorable conditions to individual micro-entrepreneurs, micro-enterprises and small businesses, rural producers and cooperatives and associations of fishing and shellfish collectors.

In addition to gross revenue of less than R$4.8 million, institutions that already receive benefits and credits under other federal programs, such as Pronampe (National Program to Support Microenterprises and Small Businesses), cannot participate in the program.

Loans will be offered by financial institutions and not directly by institutions linked to the federal government. Unlike other initiatives, such as Pronampe itself, the federal government will not offer guarantees for the program or allocate resources for this purpose.

Banks and financial institutions will assume all the risks foreseen in the operations. On the other hand, they will be able to generate the so-called presumed credit up to the limit of the value of the credit operations that they grant under this program.

The so-called presumed credit is a kind of tax incentive, which grants institutions a discount when paying taxes.

It will be up to the National Monetary Council (CMN) to define the conditions, terms, rules for granting and the characteristics of credit operations.

The deputies maintained the two amendments made by the senators, who approved the text last Thursday (4). One of them provides that, in addition to a fine and reimbursement of resources, the applicable civil and criminal sanctions will also be applied in case there is a falsehood in the request for reimbursement or deduction of the presumed credit.

In the Senate, the rapporteur of the proposal, the leader of the government in the House, Fernando Bezerra (MDB-PE), stated that the federal government estimates that the program can expand the offer of credit by around R$480 billion.

“The Ministry of Economy estimates that, due to the incentive provided for in the provisional measure, up to R$ 48 billion can be added to the institutions’ reference capital”, stated the rapporteur, while reading his report.

“Since the leverage provided for in the Brazilian prudential regulations is of the order of ten times, the provisional measure has the potential to expand the banks’ credit portfolio by approximately R$ 480 billion”, he added.