17 banks can offer payroll to Auxílio Brasil beneficiaries

Ronaldo Vieira Bento, Minister of Citizenship, said that 17 financial institutions will be able to offer payroll loans to Auxílio Brasil beneficiaries. O government he did not detail which banks are able to provide the loan, but the statement given by the minister only increased the hope of the beneficiaries of the program.

Read more: Turbocharged Brazil aid encourages sectors of the economy in just 3 days

Find out more about the offer of this credit to citizens contemplated by the Auxílio Brasil.

Brazil aid and payroll loans

The main Brazilian private banks choose not to offer payroll loans to beneficiaries of the most popular government financial aid program in the country; however, according to the minister, around 17 institutions are authorized to make the loan. Unfortunately Bento did not mention any of the names.

In a press conference held at the Planalto Palace this Wednesday, the 17th, he said: "Currently we already have almost 17 financial institutions approved by the Ministry of Citizenship able to grant the loan consigned. So it is a number that shows the interest of the market in making payroll loans available to this population”. In addition, the minister stated that “our objective is to democratize access to formal credit”.

Democratization of access to formal credit

The new type of credit is not seen with good eyes by all specialists and consumer protection entities, given the high rate of default in Brazil. Thus, the Public Defender's Office of the State of São Paulo promoted a petition entitled "Note in Defense of Economic Integrity of the Vulnerable Population” so that the consignment is debated more deeply before being put into practice.

“The granting of payroll loans to beneficiaries of income transfer programs, at the present time, tends to bring even more difficulties for this population”, said the document that also received support from the Faculty of Law of Ribeirão Black. ”If the current values ​​(of the benefits) are insufficient to guarantee a dignified life, the possibility of committing up to 40% of that amount to loans will condemn these families even more to misery”, argued.

Alternative to informal and insecure methods

Rebutting the criticism, the Minister of Citizenship counter-argued that “the democratization of access to credit, in our understanding, is a formal right of this population. Instead of being in the hands of a loan shark, in the obscure market for granting access to credit, you will be able to go, like every Brazilian citizen, to the formal market''.

Caixa Econômica Federal should, in the coming months, start offering this type of credit to beneficiaries of the Auxílio Brasil. Banco do Brasil, in turn, has not yet disclosed whether it will also extend its payroll loan to program beneficiaries.