MP allocates R$ 15.9 billion to fund that guarantees loans to small businesses

Fund is part of the government's attempt to reduce the impact of the pandemic
Covid-19 on the economy. 

Resources will go to the Operations Guarantee Fund (FGO), created to guarantee banks up to 85% of the loan amount taken by the microentrepreneur through Pronampe

The Executive Branch published on Wednesday (27), in the Federal Official Gazette, Provisional Measure MP 972/2020, which allocates an extraordinary credit of R$ 15.9 billion to the guarantee fund that will guarantee the loans granted to small entrepreneurs Brazilians through the National Support Program for Micro and Small Enterprises (Pronampe).

Recently created through the Law 13,999 / 20, Pronampe provides a special credit line for micro and small companies, with part of the guarantee guaranteed by the Federal Government, through the Operations Guarantee Fund (FGO). It is this fund that will receive R$ 15.9 billion.

Under Law 13,999 / 20, the FGO can guarantee up to 85% of the loan amount taken by the microentrepreneur through Pronampe. In practice, banks that join the program will lend the funds. The government will only guarantee the operation.

The edition of the provisional measure with the resources had already been anticipated by the Ministry of Economy last week and is another attempt by the government to reduce the impact of the Covid-19 pandemic on the economy. The funds will come from credit operations (issuance of government bonds).

The Constitution authorizes the Executive Branch to issue provisional credit measures for unpredictable and urgent expenses.

Summary rite

According to the Joint Act 1/20, of the Tables of the Chamber of Deputies and of the Federal Senate, during the pandemic, the provisional measures that deal with extraordinary credit must follow a summary rite. Thus, MP 972 should now be analyzed directly at the plenary session of the Chamber, without going through a mixed commission beforehand.

As this same joint act also allows each House to provide for additional procedures, the Senate, as determined by President Davi Alcolumbre, will not vote on any of the extraordinary credit MPs designed to combat Covid-19. According to Alcolumbre, the execution of these expenses does not depend on the approval of parliamentarians.