Removing the Debt Knot: government publishes rules for the Desenrola Brasil program; Who can join
The Initiative aims to benefit 70 million Brazilian citizens who are in debt, aiming to reduce default rates in the country.
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The Ministry of Finance issued this Wednesday (28), an ordinance that formalizes the guidelines of the "Desenrola Brasil" program for the debt renegotiation. As previously announced, the program will be segmented into two bands and will cover debts of up to R$100.
Unwind Brazil
"Desenrola Brasil" is an election promise made by President Lula, of the Workers' Party (PT). This initiative aims to facilitate the renegotiation of debts between creditor companies and individuals through a specific government platform. It is estimated that up to 70 million people will benefit from this measure. The forecast is that the program will be launched in September, starting with track 1 of the public, composed of approximately 40 million people. Then track 2, which will benefit around 30 million people. These estimates are provided by Marcos Barbosa Pinto, Secretary of Economic Reforms at the Ministry of Finance.
What will the tracks be like?
Track 1
"Track 1" of the program will benefit people with a monthly income of up to two minimum wages or who are registered in the Single Registry (CadUnique). It will be possible to renegotiate debts of up to R$ 5,000, contracted in the period from January 1, 2019 to December 31, 2022. However, it is important to highlight that the program will not include cases of debts with real guarantee, rural credit debts, real estate financing debts and operations with third-party funding or risk.
According to the ordinance, the program will be responsible for dealing with debts arising from payroll loans. The renegotiation of these debts will take place through a digital platform. For this, the debtor will access the system using his login credentials on the gov.br portal. Then, he will have the option of choosing a financial institution participating in the program to carry out the renegotiation, as well as selecting the desired amount of installments.
Among the payment terms, the following rules apply:
The interest rate will be 1.99%.
The established minimum installment is R$ 50.
Payment can be made in up to 60 installments.
The grace period varies between 30 and 59 days.
The government determined that the payment of installments can be made through debit account, PIX or bank slip. In addition, debtors will have access to a financial education course. If default occurs after renegotiation, it is possible that the beneficiary will have his name negative again.
Track 2
"Track 2" of the program is intended for individuals with monthly income of up to BRL 20 thousand. As with Track 1, Desenrola will assist in the payment of debts registered until December 31, 2022 and which remain active. The debtor will have a minimum period of 12 months to settle these debts. In this range, the program does not include cases of rural credit debts, debts guaranteed by the Union or public entities, debts in which the credit risk is not fully assumed by financial agents, debts with any type of forecast of additional public resources and debts with interest rate equalization carried out by the Union.
Unlike Tier 1, the government will not provide a guarantee for this specific group. However, as a counterpart to debt discounts, banks will receive a stimulus to increase the availability of credit.
Debt forgiveness
Banks participating in the program will be required to immediately forgive and cancel consumer debts that owe up to R$100. According to information from the Ministry of Finance, approximately 1.5 million Brazilians have debts of that amount. As established by the government order, banks will have a period of 30 days to eliminate these debts. It is important to point out that this measure only applies to banks and financial institutions with a funding volume of more than R$30 billion. As a consequence, the government will not require debt forgiveness for companies such as retailers and water and electricity companies, considering that they act as creditors in this context.
Calendar
During an interview with Rede Globo, Marcos Pinto, Secretary of Economic Reforms at the Ministry of Finance, stated that the process of registering creditors in the program will begin in July. In August, a credit auction is scheduled to determine the financial institutions benefited, while in September the renegotiation with the general public will begin.
