The facility will be payable within up to 36 months, with six months' grace period, interest rate equivalent to the CDI and zero spread

São Paulo, 27 March 2020 
In another initiative to mitigate the impact of the covid-19 pandemic on Brazilian society, the country's top three private banks have announced their participation in an emergency fund to finance the payroll of their corporate customers with an annual turnover of up to R$ 10 million. 

The aim is to guarantee that small businesses survive the crisis and, consequently, to save jobs in the highest job-creating segment of the economy. 

The credit facility will finance two months' salaries, with funding broken down as follows: 85% from the Brazilian treasury (placed in a fund to be managed by the Banco Nacional de Desenvolvimento Econômico e Social (BNDES)), and 15% from the banks, which will ensure the credit reaches their customers. Borrowers will benefit from a grace period of six months and payment in instalments of up to 36 months, with an interest rate equivalent to the CDI (no spread). Applicants will undergo a credit analysis by the financial institutions. 

The federal government has estimated that R$ 40 billion will be made available for company payrolls. 

This week, Bradesco, Itaú and Santander announced that they would be importing five million covid-19 test kits and equipment such as scanners and ventilators, according to market stocks. The material will be donated to the Brazilian health ministry to support the fight against the spread of the novel coronavirus. 

According to the chairman of Bradesco, Octavio de Lazari, the banks will be partners in solutions to the crisis. "This is a new step by private retail banks, in partnership with the federal government, to help protect the Brazilian economy at this time of crisis caused by the coronavirus pandemic. By offering credit facilities to pay our customers' payrolls, we are playing a decisive role in saving the jobs and income of thousands of workers. All three of our banks have national reach and, as such, can help with the payrolls of most micro and small-sized enterprises in Brazil, supporting predictability and social stability in this transition period." 

The head of Itaú Unibanco, Candido Bracher, believes this measure will give some breathing space to millions of entrepreneurs at a time of economic hardship. "This is a clear example of how partnerships between the public and private sectors can help society's wellbeing. We have been working tirelessly since the start of the crisis to help minimise the impact of -19 on our country, be it by donating medical equipment or by offering products and services that effectively support our customers. Our response to the crisis demands unity and solidarity, as shown once again with this initiative." 

Sérgio Rial, chairman of Santander Brazil, stresses the initiative's timeliness. "This financing structure is a great example of the importance of having the Brazilian government work with the private sector. We will extend working capital to small-sized enterprises with the sole aim of saving jobs, to ensure the continued viability of economic activity and the return of growth as soon as possible. The three largest private banks have once again shown their commitment to being an active player in the building of pragmatic and quick-to-implement solutions." 

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