Brazil unveils massive credit line for micro, small businesses

Brazil's President Michel Temer announced on Wednesday 30bn reais (US$9.28bn) in credit for micro and small businesses.

According to state news agency Agência Brasil, the federal government also issued a decree that facilitates the export of goods by these businesses.

The line of credit will allow businesses to take out loans with private and public sector banks to purchase machinery that will help modernize the sector in order to increase productivity and help boost confidence in micro and small businesses.

Lower interest rates and special conditions will be offered by Bradesco, Itaú, Santander, Banco do Brasil, Caixa Econômica Federal and development bank BNDES.

Agência Brasil reported that the secretary for micro and small businesses, José Ricardo Veiga, said the banks decided to cooperate with the government because they "believe in" the plan, but they have "total freedom" to stipulate their rates and determine the amount of funds they will make available.

Of the total, 10bn reais will come from Banco do Brasil and 10bn reais will come from Caixa. According to Veiga, the line of credit is already extrapolating the 30bn reais initially promised.