Desenrola Brasil could reduce defaults in the country by up to 40%

“It is very bad for people to want to buy something and not be able to because they have a late debt. I wanted to buy some things for my house, which I need and I can’t buy because of these debts: a cupboard, a stove. Now, I had a debt with a television and a wardrobe, but it was on my brother’s credit card. If I had paid my bills, I would have bought it on my card,” she reveals.

Márcia hopes to be able to participate in Desenrola Brasil, the Emergency Debt Renegotiation Program for Delinquent Individuals, launched this Tuesday (6th) by the federal government, in Brasília. “It will be an advance for me, because I will settle my debts and I will be able to buy my things that I want to buy for my house”, she says.

Provisional Measure (MP) 1.176/2023, which establishes the program, was published in the Official Gazette on Tuesday (6) and takes effect immediately. But, to become law, it will need to be voted on and approved by the National Congress within 90 days.

Desenrola Brasil intends to join debtors and creditors so that the debt can be renegotiated and the default situation ended. There will be two tracks. In the first, people who earn up to two minimum wages or who are enrolled in the federal government’s Single Registry (CadÚnico) – and who were negative until December 31, 2022 – will be able to settle their debts of up to R$ 5 thousand.

Term

Payment can be made in cash or in installments. within 60 months, with discount and lower interest. The money to pay the debts can be obtained through a loan from a financial institution, which can be guaranteed by the Federal Government’s Operations Guarantee Fund (FGO).

The second range, according to the Ministry of Finance, is intended only for people with debts with the bank, which can offer its customers the possibility of renegotiating directly. These operations will not be guaranteed by the FGO Fund.

According to the Ministry of Finance, the program will work through a reverse auction between creditors, organized by credit category, where whoever offers the most discount will be included in the program, will present the debt with a discount to renegotiate with individuals and will have the guarantee of your debt will be paid off.

Those who offer less discount will be left out of the program. Therefore, it is possible that the debtor does not find all his debts to renegotiate in Desenrola.

specialists

The Director of Institutional Relations at the Brazilian Consumer Defense Association (Proteste), Henrique Lian, considers the program “extremely relevant in the current context of over-indebtedness of a significant portion of the Brazilian population”.

For economist Carla Beni, from the Getulio Vargas Foundation (FGV), the measure is important so that people with lower incomes can “breathe again and even be able to consume again”. it even affects mental health,” he says.

She believes that the program could reduce defaults by up to 40% in the country, which currently affects 66.08 million people, or 40.6% of adult Brazilians, according to data released in May by the National Confederation of Shopkeepers (CNDL) and by the Credit Protection Service (SPC Brasil). Carla points out, however, that it will be important to think about campaigns to ensure that debtors adhere to the program.

“You will need guidance and a lot of publicity, because you will need a cell phone and everything will be done online. It is necessary to wait for the next steps to see how the application will be used, how it will be inserted in the platform and how easy it will be to join. As we have an experience with Pix and Brazil had a spectacular adhesion, I believe that we have not only a technical and technological condition, but also the adhesion of the population itself (to the new program). She is already used to using the cell phone”, he points out.

Consumption

Izis Ferreira, economist at the National Confederation of Trade in Goods, Services and Tourism (CNC), believes that the program could boost consumption by Brazilian families.

“Credit works today as an important conditioning factor for consumption, not only for products that need a deadline for payment, with greater added value, but also for everyday products and services that are consumed immediately. So, credit today is a support for the consumption of basic necessities and higher added value products”, he points out.

In a note, the Brazilian Federation of Banks (Febraban) reported that the program is in line with negotiations made in recent months between the institution and the federal government.

“When it goes into operation, the banks will make their contribution so that Desenrola reduces the number of negative consumers and helps millions of citizens to reduce their debts”, says a note from Febraban.

In the opinion of Ione Amorim, coordinator of Financial Services at the Brazilian Institute of Consumer Defense (Idec), the urgency with which Desenrola Brasil was launched is important, but a little more dialogue with civil society was lacking. And so there are some doubts about the program.

She questions, for example, how consumers who resort to Desenrola Brasil will be treated by the financial institution in the future. “Today, when we have a very large discount (at a bank), this consumer is restricted within that institution, whether he will try a credit again”, she opines.

Delinquency reduction should increase trade movement – Tânia Rêgo/Agência Brasil

In addition, Ione draws attention to the debts that are already expired and that should no longer be collected, but that may enter the Desenrola. “Who will do this analysis?”, she questions her.

discounts

Another point highlighted by her is about the value of discounts. “This low-income population is extremely harassed by companies offering extremely predatory credit (with very high interest rates). So, what is the value of these contracts that will be the object of this agreement? The full amount already including abusive interest rates? When you talk about the discount, and there is no parameter, what is the benchmark?”, she asks.

In addition to the program, a cause for concern for Ione refers to future debts that may again involve the consumer after the program is closed, in December of this year.

“This consumer, without any preparation, who was harassed (to take out credit), remains hostage to the same types of approach. It is very likely that part of this public, by December, which is the limit of this program, will again be in debt. A very large portion of this segment, which earns up to two minimum wages, is retired and pensioners, who are very exposed to the issue of payroll loans”, warns Ione.

Ione said he hoped that the regulation to be made by the Ministry of Finance and the consideration of the matter by the National Congress open space for more dialogue with consumer protection entities.

Henrique Lian, from Proteste, said he believed that the program could be supplemented in the future “with actions of a regulatory and educational nature with a view to preventing recurring insolvency.”

The concern is the same as that of Izis Ferreira. For her, if there is no financial education program for families, there is a risk of default continuing to be a cyclical problem in the country, with periods of improvement and others of worsening.

According to the CNC, in May of this year, the number of people with debts for more than 90 days represented 45.7% of defaulters. This is the highest rate for a month in three years and has been growing since December 2022 (43.9%).

“Credit gained relevance in the post-pandemic as a condition for consumption. People are focusing too much spending on their credit cards. Given this context, the concern we have to have is: are we going to rescue this consumer from default, but later on will he understand that he needs to be a little more cautious, programming and planning when using credit? At the same time that the creditor carries out the renegotiation, he has to intensively stimulate the financial awareness of this consumer. Otherwise, we will continue to see this cycle of default”, says the economist.

Before the edition of the Desenrola Brasil MP, the CNC estimated that the percentage of families with debt for more than 90 days would only fall at the end of the day, closing 2023 at 44.5%. With the launch of the program, however, the confederation will make a new forecast.

default

According to Izis Ferreira, despite the program being more focused on the lower income public, defaults have also grown in the middle class. Therefore, for her, it would be important to encourage the renegotiation of debts for this income bracket as well.

For those who have difficulty keeping the budget under control, economist Carla Beni has two tips: the first is to talk to all family members to understand how much can be spent without compromising income. The second is to write down – in a computer spreadsheet or even on a sheet of paper – all the bills that need to be paid.

“People should talk more within their families about their bills to pay and their debts”, explains Carla. “And also make a list of bills to pay. A simple paper with a pen helps a lot to put – in future months – all the bills that that family has to pay that are already compromised. This can even be placed on the refrigerator door. This helps the whole family move in the same direction, because the reduction of debts brings relief, comfort and quality of life for everyone in the house”.

The Minister of Finance, Fernando Haddad, said, on Tuesday (6), that Desenrola will have a financial education. On Monday (5), Haddad had said that the program should come into force in July.