Senate approves project that guarantees resources for Pronampe until 2024

The Senate approved this Wednesday (27) a bill that extends until the end of 2024 the application of emergency resources to guarantee and leverage loans from Pronampe (National Program to Support Micro and Small Businesses).

The proposal was symbolically approved by the senators. As it had already been processed by the Chamber of Deputies, it now goes to the sanction of President Jair Bolsonaro (PL).

The approval takes place in the same week that the government made official the launch of a credit program, which provided for the renewal of Pronampe.

Pronampe was created in 2020 to support micro and small businesses affected by the new coronavirus pandemic. Initially temporary, the program later became permanent and became one of the Jair Bolsonaro government’s bets to stimulate the economy.

Banks began to provide credit to micro and small companies under better conditions, with lower interest rates and requiring fewer guarantees and counterparties. This would be possible because the federal government made a billionaire contribution —initially of R$ 15 billion and which reached R$ 62 billion — in the FGO (Fund Guarantee of Operations), to cover possible risks.

The legislation referring to the program, however, provided that the granting of credits would only last until the end of last year. As a result, funds from the fund or that return with the payment of loans would return to the National Treasury. The bill’s report estimates that the default on these loans stood at 4.5%

The approved bill extends the use of these resources until the end of 2024.

“It is in this return of payments that we are approving this law here today: it is so that these funds that are entering the FGO do not return to the Treasury, which is what the pandemic decree determined”, said the rapporteur of the proposal, senator Kátia Abreu (PP-TO), who participated in the session virtually from the hospital, where she is hospitalized.

As a result, the resources provided by the government through extraordinary credit — which are outside the limits of the spending ceiling fiscal rule — would only be returned from 2025 to the National Treasury.

The rapporteur calculates that R$ 50 billion can be borrowed in this new phase of Pronampe.

The senators maintained an amendment promoted by the Chamber, which resumed the obligation of companies to maintain levels of employability during the period of contracting the loans. This obligation had been relaxed in 2021, due to the cooling of the new coronavirus pandemic, with companies facing financial difficulties.

“In 2021, due to the very strong crisis of the pandemic, there was no obligation for these micro and small companies to keep employees, as a matter of emergency, because the program, when it was created, was to keep the job, not to leave, in the pandemic, companies fire people. But this was a reason for a lot of restriction. At the height of a crisis, the entrepreneur to take some money and keep the obligation of not being able to fire anyone, it is very heavy. So, this was made more flexible in 2021”, said the senator, who was against the measure, but who accepted the change.

“We all want to keep employment in the country. But it cannot be by force, at the cost of the sacrifice of micro and small companies in the country. It is the growing Brazilian economy that will keep employment and not the obligation by law”, he added.

The economic team predicts that the new Pronampe resources should be operational within 45 to 60 days after the sanction. The government expects to mobilize another BRL 50 billion with new operations to be contracted by December 31, 2024. Entrepreneurs with active loans, but with difficulties to pay the installments, will also be able to renegotiate their contracts — a demand from trade and services.

Another point of the approved text provides for the resumption of the PEC (Credit Stimulus Program), a program that encourages the granting of credit to micro and small and medium-sized companies.

The program allows financial institutions to convert any temporary losses with these operations into tax credits to pay less tax. The measure frees up the capital of banks that would otherwise be committed to these transactions, which helps to leverage a greater volume of credit.

The program had ended at the end of 2021, but the text extends its term until December 31, 2022.

In its first version, the PEC could be used by financial institutions in loans granted to individual micro-entrepreneurs or companies with annual revenues of up to R$ 4.8 million.

Now, the text also includes the segment of medium-sized companies, with annual gross revenue of up to R$ 300 million.

Also this week, the Bolsonaro government made official the launch of a new credit program aimed at small businesses, with a promise to inject around R$87 billion in financing.

The focus of the program, called Crédito Brasil Empreendedor, is to provide financing for MEIs (individual microentrepreneurs), micro, small and medium-sized companies. The program launched by the government includes the renewal of Pronampe.

What is Pronampe?

• Credit program to support micro-enterprises, small businesses and individual micro-entrepreneurs, with advantageous interest conditions and terms

Why are the conditions advantageous?

• The federal government made a billion-dollar investment in the FGO (Fund Guarantee of Operations), to cover the risks of operations. That’s why interest rates are lower than other lines offered by banks

What are the credit limits that can be requested?

• Up to 30% of annual gross revenue, calculated based on the previous year.
• In the case of companies with up to one year of operation, the loan limit will correspond to up to 50% of the share capital or up to 30% of monthly revenue, whichever is more advantageous.

What does the new project change?

• In principle, emergency resources could be used in the Operations Guarantee Fund until December 2021. The approved project extends the application of these resources until the end of 2024 and therefore guarantees the existence of the program

Will there be an increase in resources in this new phase?

• The Ministry of Economy estimates that R$ 50 billion should be offered as credit in this new phase