The start date for the release of the payroll loan for families registered with Auxílio Brasil has already been defined. The government announced on Friday, October 7th, that 12 banks and financial institutions will be able to offer credit from October 10th.

The Auxílio Brasil loan, approved by President Jair Bolsonaro on August 4, was not yet available in September for the then 20.65 million beneficiaries. Now the group, made up of 21.13 million in October, will be able to take out the loan at 12 banks and institutions regulated by the Ministry of Citizenship.

Even with the president's approval, the Auxílio Brasil loan still depended on government regulation to be made available to families. The head of the Citizenship department had already confirmed the planned launch of the Auxílio Brasil program for the month of October.

According to the Minister of Citizenship, the Auxílio Brasil loan will begin on October 10th. The provisional measure establishing the benefit was received by the General Secretariat of the Presidency on July 14 and had 15 days to be sanctioned. The signature was published in the Official Gazette of the Union on August 4th.

Bolsonaro was expected to sign the MPV within the deadline for releasing the Auxílio Brasil loan in August. However, it was necessary to publish the ordinance containing the other rules to guide financial institutions.

However, the impasses in defining the rules that regulated the contracting of payroll loans, especially the interest rate, ended up delaying the deadline for release expected by the government.

According to the head of the Citizenship department, the Auxílio Brasil loan modality will contribute to the financial education of families benefiting from the program, as they will not need to obtain the money in the informal market. Some of these families are already in debt, but do not have access to the formal market. So they end up turning to the informal market to obtain these loans and are exposed to the intolerable interest rates that we see in the parallel loan market, he concluded.

The Ministry of Citizenship confirmed that initially there will be 12 financial institutions offering the payroll loan. See below:

Banco do Brasil, another large public bank, said that “is analyzing the possibility of operating the consigned loan, which still depends on the regulation of business conditions” and was left out at the beginning.

The installments are deducted directly from the beneficiaries' benefits every month. The loan can only be made by the registered family member. 

The loan installment can be up to 40% of the benefit value, counting the value of R$ 400, therefore R$ 160 can be deducted monthly. The maximum payment term is 24 installments.

The loan interest rate is capped at 3.5%. However, any financial institution can offer lower rates.

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