SAO PAULO, May 19 (Reuters) - Brazil's government on Tuesday unveiled a program offering up to 30 billion reais ($5.95 billion) in subsidized credit for ride-hailing drivers and taxi operators to finance new vehicles, part of a broader effort to expand access to lending.
• The measure, signed into law by President Luiz Inacio Lula da Silva, adds to a pattern of pre-election stimulus, embedding subsidies through cheaper credit and expanding the role of state-backed lending
• It comes as Brazil's central
bank has warned that subsidized credit can weaken the transmission of monetary policy by blunting the impact of interest rate changes on borrowing costs
DETAILS
• The program will provide loans at below-market interest rates for the purchase of new cars priced at up to 150,000 reais, including flex-fuel, hybrid and electric models that meet sustainability criteria
• Eligible applicants include app-based drivers with at least 12 months of activity and a minimum number of trips, as well as registered taxi drivers
• The government estimates that between 1.2 million and 1.4 million workers could qualify for the program
• The program will be operated by state development bank BNDES, which will channel the funds through partner financial institutions, backed by a federal credit guarantee scheme covering up to 80% of loan risk
($1 = 5.0378 reais)
(Reporting by Isabel Teles; Editing by Chris Reese)
