Brasília, 3/22/2004(Agência Brasil) – In his radio talk ("Breakfast with the President") to the nation today, president Luiz Inácio Lula da Silva declared that last year the country's financial system underwent a severe transformation. "What we did in 2003 has never been done in this country," said the president, adding that the objective was to get banks working for society.
Lula pointed out that the amount of credit available for micro-financing had increased and would continue to do so. He cited the case of the Banco do Brasil where US$2.75 billion (R$8 billion) went out in loans in 2002, but could rise to as much as US$6.2 billion (R$18 billion) this year. And the effort by another federal bank, the Caixa Econômica Federal, which opened 500,000 accounts in its project to transform lottery betting stores and post offices into banking points in remote places where there are no bank branches.
Lula also emphasized the importance of the "Grow Northeast" ("Cresce Nordeste") program which was inaugurated last week with a budget of US$1 billion (R$3 billion). It will finance small businesses in various sectors, such as aquaculture, apiculture, agriculture, commerce and services in the economically sluggish region of the Northeast. "Loans made by this program will charge below-market interest (around 6% annually) and they will have to be paid back over a longer period of time (up to 12 years) with a grace period of four years," explained the president.
In his breakfast-time chat, Lula criticized government-run banks for what they did in the past. "Funds that were supposed to help the Northeast frequently never got to the people who needed them." They were so loosely controlled that the banks didn't know who made the loan or how to recover them, said the president.
In conclusion, Lula said that bank managers are not accustomed to making loans to small businesses but that that was going to change. "This means we will put banks to work for the people so that small businesses will have access to credit. That is our goal. We will achieve that." (translator: Allen Bennett)
