Help is on the way to small businesses in Brazil, as the country plans to launch a $1.9 billion program to support micro businesses hit by the coronavirus pandemic, according to a Reuters report.
Citing sources with the Economy Ministry, the report said the proposal is slated to be unveiled later this week, and will be implemented by state-owned lender Caixa Economica Federal. It is expected to assist as many as 3 million small businesses whose annual revenues do not exceed 360,000 reais ($69,458), the news service said. There’s one caveat: applicants must have good credit.
Under the scheme, small companies would get credit for 30 percent of two months’ worth of revenue. That number, a source said, would be sufficient to keep the business afloat.
The news service said the Economy Ministry press office and Caixa Economica Federal did not respond to requests for comment.
One of the unnamed sources told Reuters that 10 billion reais, or $1.9 billion, of financing could flow to companies that have paid their small business income taxes.
Brazil is among the hardest hit by the coronavirus. As of April 8, it was the Latin American country with the highest number of confirmed cases of COVID-19 — the disease caused by the coronavirus — at 22,318, according to Statista. By state, São Paulo ranked first in the number of confirmed cases, with over 6,700 occurrences.
Last week, Brazilian President Jair Bolsonaro said COVID-19 was “a little flu” and dismissed media coverage of the pandemic as “hysteria,” the Los Angeles Times reported.
In defiance of common-sense social distancing guidelines issued by his own health officials, the president urged Brazilians to attend large protest rallies and get back to work to prevent a collapse of the country’s economy.
The Ministry officials told Reuters the original plan was to have the country’s Treasury Department make funds available through public banks. But such a measure would take much longer because it must be drafted and considered by Congress.
The impact of the coronavirus comes at a difficult time for Brazil. Its budget deficit is already nearly 500 billion reais ($96 billion), or 7 percent of gross domestic product, the report said.