Rural exporters will have a credit line of US$ 1 billion

With US$ 1 billion available, the line will finance the purchase of equipment by the agricultural sector. Among the items that may be financed are agricultural machinery, irrigation systems, silos, storage structures and solar energy systems. Those who commit illegal deforestation will not have access to the line.

The creation of the credit line was announced this Tuesday (25) by the acting president, Geraldo Alckmin, and by the president of the BNDES, Aloizio Mercadante. According to Mercadante, there will be an official launch during the International Fair of Agricultural Technology in Action (Agrishow), which takes place from May 1st to 5th in Ribeirão Preto (SP).

“Agricultural exporters who have receivables (amounts to be received) in dollars will be able to operate this line for the purchase of machinery, equipment, tractors, harvesters, instruments for irrigation, storage,” explained Mercadante. “The only thing you can’t do is have illegal deforestation. We monitor the properties, and those who deforest illegally will not have access to the line.”

According to the vice-president of the Republic and acting president, Geraldo Alckmin, the new line serves as a low-risk option for exporting agribusiness. “For those who export agribusiness, the possibility of having financing in dollars is much cheaper. All we want is cheaper credit to leverage growth, attract investment,” said Alckmin. In addition to the BNDES, partner institutions such as Banco do Brasil, the main supplier of rural credit in the country, will be able to operate the credit line.

low interest

The line will work as follows. The exporter will contract a debt in Reais corrected by the dollar. However, those who sell abroad have receivables in US currency, which reduces the risk of exposure to changes in the exchange rate because the receivables are also indexed to foreign currencies.

“If he (the exporter) loses at one end, he wins at the other. For example, if the real depreciates (and the dollar rises), export profitability improves, but the debt becomes more expensive. If the real appreciates (and the dollar falls), it is the opposite”, explained Mercadante.

The credit facility will bear interest below the Long Term Rate (TLP). Comprised of an average of long-term government bond market rates corrected for inflation, the TLP is currently around 19% per annum. According to Mercadante, because of the correction of installments by exchange variation, the effective interest may be lower.

“(The rate for the new line) drops from 19% to 7.5% per year. But, as the index is the exchange rate and the company exports in exchange rate, it actually drops from 19% to 3% per year. I think it’s one of the most creative things we could do in this scenario of very high interest rates”, highlighted the president of BNDES. According to Mercadante, the government intends to extend the model to industries and export services.

Pronampe

Alckmin and Mercadante also announced the conditions for the National Support Program for Micro and Small Businesses (Pronampe), whose new law was published on Monday (24) in Official Diary of the Union. The grace period will rise to 18 months, with the micro or small company starting to pay the financing only after that period.

The new law establishes a minimum grace period of 12 months for Pronampe lines. The financing period, as provided for in the rule, was extended from four to six years. Interest is 6% per year plus the Selic Rate (basic interest rate for the economy).

The new conditions are not only valid for future loans. The law allows contracts signed from 2021 to be renegotiated by the new rules, but the process must follow conditions established by the federal government.

According to Alckmin, the two measures – new line of rural credit and conditions for Pronampe – intend to leverage investments and generate jobs and development. The acting president informed that president Luiz Inácio Lula da Silva, who is traveling to Portugal and Spain, asked for a meeting with public banks to find alternatives to high interest rates.

Created in 2020 as a relief measure during the pandemic, Pronampe allows micro and small businesses to borrow up to 30% of annual turnover. Resources can be used to purchase equipment and merchandise, renovations and operating expenses. The program prohibits the use of the credit line for profit sharing.