Since then, the BNDES has had a fundamental role in providing financing to spur economic growth and promote economic development around the country.Now that Brazil has enjoyed years of price stability, commercial banks are much more active in financing private businesses, with lenders such as Banco BVA and Banco Rendimento leading the way.
A plan for stability
Brazil has been in the headlines for years, thanks to its booming economy and its rapid recovery from the world economic crisis. The groundwork for that boom, and for the strong growth of the country’s banks, was laid by Fernando Henrique Cardoso, Minister of Finance from May 1993 through April 1994. His Plano Real in 1994 helped stabilize prices and free the economy from the debilitating effects of hyperinflation.
Slowing it down
Sometimes too much growth can be a bad thing. Brazil’s growing middle class is eager to buy more and more consumer products, cars and homes, and the country’s banks have been happy to lend them the money. Strong lending growth has boosted banks’ profits for years, and showed few signs of slowing. Rapid consumer credit growth is being monitored by Brazil’s government and central bank, which have strong commitments to keeping inflation under control. The Finance Ministry recently doubled a tax on consumer credit, from 1.5% to 3%, and Central bank president Alexandre Tombini has said that the bank will raise its benchmark interest rate as often as necessary to slow price increase.
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