Congress approves new Pronampe, with credit for small businesses. See how the loans will work
The Senate, in Brasília, approved on Tuesday the bill that establishes the new Pronampe, a permanent program aimed at granting credit to micro and small businesses. This financing is accessible to Individual Microentrepreneurs (MEI), microenterprises with an annual revenue of up to R$ 360,000, and small businesses with an annual revenue of up to R$ 4.8 million. The interest rate can reach 9.5% per year (6% plus the current basic interest rate of 3.5%), with a repayment term of 36 months, including an eight-month grace period. The government is expected to inject R$ 5 billion into the Guarantee Fund for Operations (FGO) to leverage the operations. Additionally, the project allows for the extension of installments of the previous Pronampe for up to 12 months and doubles the maximum term to 72 months.
Gabriel Shinohara
2021-05-11
Approval of the New Pronampe and Access Conditions
The Brazilian Senate, in Brasília, approved on Tuesday the bill that creates the new Pronampe, a permanent program to facilitate access to credit for micro and small businesses. This financing is available for Individual Microentrepreneurs (MEI), microenterprises with an annual revenue of up to R$ 360,000, and small businesses with an annual revenue of up to R$ 4.8 million, taking the revenue from the year prior to contracting as a reference. The defined interest rate is up to 6% per year plus the basic interest rate (currently 3.5%), resulting in a total of up to 9.5% per year, with a repayment term of 36 months and an eight-month grace period.
Differences of the Program and Government Contribution
The main difference compared to last year's Pronampe lies in the increase of the interest rate, a change made to compensate for the reduction of the percentage of loans guaranteed by the government. The goal is to keep the program attractive for financial institutions, allowing them to add their own resources. Initially, the government will inject R$ 5 billion into the Guarantee Fund for Operations (FGO), a mechanism that secures the operations. Additionally, the project allows for the extension of overdue and upcoming installments of the Pronampe granted last year for up to 12 months, and doubles the maximum repayment term to 72 months.
Contracting Process and Financing Limits
To contract the credit, it is necessary to wait for the presidential sanction and the injection of resources into the FGO. The institutions that already provided the program last year, including private banks, public banks, credit cooperatives, and fintechs, will be able to grant the credit again. The financing limit is up to 30% of the company's revenue in 2019 or 2020, whichever is more advantageous. For companies created less than a year ago, the limit can be 50% of the social capital or 30% of the average monthly revenue, whichever is more advantageous, with examples such as R$ 90,000 for a company with a revenue of R$ 300,000.
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