Brasília, 6/26/2003 (Agência Brasil - ABr) - Yesterday minister of Finance, Antonio Palocci, met with the press to explain the details of the Microcredit Plan announced by president Luiz Inácio Lula da Silva. Here is a summary of what he said.

According to Palocci, one of the main measures in the plan is the creation of flexible rules for the creation of credit cooperatives which will make it possible for around 95% of all the municipalities in the country to have one. Another important measure will permit banks to work with simplified special accounts for low-income clients that will not require mininum balances.

Palocci said the authorization for the Banco do Brasil to create two subsidiaries for microfinancing and buyer clubs (consorcios) is an example of microcredit expansion. "This will be known as the Banco Popular do Brasil," and it will serve needy, low-income clients, he explained.

The minister also explained that the Worker Assistance Fund (Fundo de Amparo ao Trabalhador) will get an injection of R$1.3 billion in order to permit it to make loans for working capital and construction material.

Palocci concluded by saying that all the measures to stimulate microcredit will take place within a framework characterized by strict control of operational costs with the objective of streamlining microcredit operations and increasing the ability of financial institutions to work with microcredit. (AB)