President Jair Bolsonaro sanctioned, on the 24th, the law that creates the Simple Credit Company (ESC). The processing of the bill in the National Congress was concluded on March 19, after approval by the Federal Senate. In practice, any person will be able to open a simple credit company to lend resources in the local market to micro and small companies.
According to the Ministry of the Economy, individuals will be able to open an ESC in their cities and lend money to small businesses, such as hairdressers, small markets and bakeries.
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There is no requirement of minimum capital for opening the company, but the permitted annual gross revenue will be at most R$ 4.8 million, with the charging of fees and tariffs also being prohibited.
“Our hope now is that, with the simple credit company, in the most diverse corners of Brazil, we can lend money at lower interest. You, who have a little money in savings, take it out of savings, open a company and start lending money to those who produce and work in this country”, stated Senator Jorginho Mello (PR-SC), in a speech at the ceremony of sanctioning the new law. Mello is the author of the legislative project that gave rise to the simple credit company.
The government estimates that the creation of the ESC may inject R$ 20 billion per year in new resources for small businesses in Brazil. This represents growth of 10% in the credit-granting market for micro and small companies, which, in 2018, reached the amount of R$ 208 billion. According to an estimate by the Brazilian Micro and Small Business Support Service (Sebrae), this result should be achieved at the moment when the first thousand simple credit companies enter into activity.
Simple Credit Company
The former national president of Sebrae, Guilherme Afif Domingos, currently special advisor to the Ministry of the Economy, also spoke at the ceremony and criticized the difficulty for small entrepreneurs to access the credit market in Brazil. For him, the ESC will democratize and reduce the cost of credit.
“The simple credit company is that individual who, without any authorization, because no authorization is needed, simply registers a company, which is a simple credit company, and starts lending in his community, at an interest rate that will certainly be lower than what is offered in the region, because today the large banks take deposits from everyone, but only lend to some”, said Afif.
Despite the name, simple credit companies will have the tax regime of a conventional company, by actual or presumed profit, and therefore cannot be classified under the Simples, which is the regime applied exclusively to micro and small companies.
CNI supports
In a note, the National Confederation of Industry (CNI) says that the creation of the simple credit company will contribute to the expansion of credit for micro and small companies, but emphasizes that it is necessary to also advance on other points of the sector’s competitiveness agenda. According to the CNI, one of these points is the continuity of the action of the Agenda BC+ for the reduction of the banking spread. Spread is the difference in prices between the moment of investment and the moment of redemption before the maturity of a security.
With the measure, in addition to having access to alternative lines of financing, micro and small companies will pay less interest to contract credit and, with this, will contribute to the development of the Brazilian economy and to the generation of jobs, the CNI states.
“One of the great challenges of micro and small companies, which are the great employers in Brazil, is to have access to cheap credit. The creation of the ESC is a fundamental step for the continuity of the growth of credit grants and for the reduction of the cost of financial capital in the country”, said the acting president of the CNI, Paulo Afonso Ferreira.
For the CNI, the government still needs to make progress in the implementation of the Positive Registry (Cadastro Positivo), strengthen the capital market and create the National System of Guarantees for financing.
Source: Agência Brasil
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