Brazil Allows Real Estate As Collateral For Loans
Brazil’s central bank on Tuesday announced a series of measures to potentially pump hundreds of billions of reais into the economy, boosting credit in particular to micro, small and medium-sized companies struggling in the coronavirus crisis. The measures include allowing banks already extending loans to small and medium-sized enterprises, known as SMEs, to reduce reserve requirements, lowering banks’ requirements for contingent liabilities provisions, and possibly allowing firms to use real estate as collateral for new loans. According to the central bank, the three measures could free up to 55.8 billion reais ($10.8 billion), 127 billion reais and 60 billion reais, respectively, in potential loans, with SMEs being the main beneficiaries. In a presentation outlining the central bank’s crisis-fighting measures, the Bank President said the flow of credit to micro, small and medium-sized firms has cooled in recent weeks, so this is a sector that needs additional support.
Tags : INTERNATIONAL Real Estate Loans coronavirus crisis Brazil central bank