Brasília, 6/26/2003 (Agência Brasil - ABr) - Yesterday the Brazilian government launched a bold attack on the country's economic problems with a series of measures aimed at making credit easy for low-income families. Called the National Microcredit Plan, its main impact will be making it possible for some 25 million Brazilians to open a bank account. Under the plan, opening a bank account will involve little red tape and it will not be necessary to prove income or maintain a minimum balance.
The government also announced simplified micro-loans, which will be possible due to new rules on financial institution sight deposits, interest and fees. According to minister of Finance, Antonio Palocci, the government would like interest rates of around 2% per month for loans of between R$200 and R$600.
Another fundamental measure in the plan is expansion of credit cooperatives which are presently restricted mostly to rural producers and commercial establishments. Under the new plan, any municipal with a population of up to 100,000 can freely create cooperatives. Palocci says that will permit 95% of the municipalities in the country to have cooperatives. The measure takes on added importance in view of the fact that there are 1,600 (out of over 5,500) municipalities in Brazil that do not have bank branches.
President Luiz Inacio Lula da Silva is reported to see the microcredit plan with expanded credit cooperatives as a way to reduce the country's bank spread and lower interest rates. Lula has pointed out that only 1.5% of all loans in Brazil come from credit cooperatives. In Germany that percentage rises to 20%, in Spain to 45%, and in Italy 28%. In the United States, 80 million people use credit cooperatives which have assets totalling some US$480 billion. According to Lula, "Without a doubt this is one of the reasons we have interest rates in the stratosphere. They have begun to fall. We have to bring them down more, which will be possible with a responsible plan for longlasting structural changes in our financial system. We need a system that serves everyone." (AB)
