BRASILIA --The presidents of the Banco Nacional de Desenvolvimento Economico e Social, Guido Mantega, and of the Inter-American Development Bank, Enrique V. Iglesias, signed today an agreement for a $3 billion conditional credit line to support expansion, integration and financing for Brazilian micro, small and medium-sized enterprises.
The program will provide medium and long-term financing for investment projects to make firms more competitive for small initiatives, which represent 95 percent of total business and are responsible for 64 percent of employment in the country.
The conditional credit line will allow BNDES to use resources from three operations of up to $1 billion each in a nine-year term beginning with the signing of the agreement. Use of these resources will depend on BNDES’ requests and the approval by simplified procedure of the operation by the IDB Board of Executive Directors.
In December 2004 the IDB Board of Executive Directors approved a first $1 billion financing as part of the credit line. The operation was approved in the context of the Bank’s strategy agreed upon with Brazilian authorities in conjunction with the country’s 2004-2007 Pluriannual Plan to achieve socially inclusive sustainable growth.
The BNDES, the only significant source of medium and long-term financing for financial intermediaries in Brazil, guarantees the increase in volume of credit for micro, small and medium-sized companies, which play a fundamental role in the modernization of industry and services and the reengineering of the productive processes.
Since 1995 the IDB has supported four successful multisectoral credit line programs with BNDES for a total of $3.5 billion.