Brazil’s Desenrola Program Helps Restructure $10.37 Billion in Consumer Debt

Brazil's 'Desenrola' debt renegotiation program, a campaign promise of President Lula, successfully restructured 53.07 billion reais ($10.37 billion) in consumer debt, reaching 15.06 million people. Despite falling short of its 30 million target, it significantly reduced delinquency rates among low-income families affected by the pandemic.

Reuters | Brasilia | Updated: 22-05-2024 02:27 IST | Created: 22-05-2024 02:27 IST
Brazil’s Desenrola Program Helps Restructure $10.37 Billion in Consumer Debt
  • Country:
  • Brazil

Brazil's government said on Tuesday that its recently concluded consumer debt renegotiation program "Desenrola" reached 15.06 million people, half of the initial target. Still, the Finance Ministry said in a statement that the program achieved its goal by restructuring 53.07 billion reais ($10.37 billion) in debt, or 0.5% of gross domestic product (GDP), "reducing delinquency among the population most in need."

The program, which ended on Monday, was a much-anticipated campaign promise of leftist President Luiz Inacio Lula da Silva to ease the financial strain on families affected by the pandemic and facing elevated borrowing costs following a previous inflation surge. Its deadline was extended twice in order to reach more people. The program was originally set to conclude in December.

At the program's launch in July last year, the government estimated it could benefit 30 million people in its first phase alone, involving direct negotiations between banks and consumers without Treasury guarantees. Later, Finance Minister Fernando Haddad said that the 30 million figure referred to the overall potential of the program.

The program also involved a second phase with Treasury guarantees for those earning up to twice the monthly minimum wage to renegotiate debts with maximum discount. The government allocated 8 billion reais to a fund for this purpose, but only 1.7 billion reais were used. According to the ministry, the remaining amount can be allocated to other public policies later. ($1 = 5.1175 reais)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Give Feedback