UPDATE 1-Brazil's Finance Ministry eyes three-month extension for consumer debt renegotiation program

Reuters
2-min read

(Adds context, central bank bank data)

BRASILIA, Dec 6 (Reuters) - Brazil's government aims to extend the deadline for its broad consumer debt renegotiation program "Desenrola" by an additional three months, said a top Economy Ministry official on Wednesday.

The original closing date was set for the end of this year.

As a campaign promise of leftist President Luiz Inacio Lula da Silva, the government launched the program to ease the financial burden on families, strained by the pandemic and high borrowing costs following a previous inflation surge.

About 72 million people in Latin America's largest economy have been blacklisted, according to October data from credit bureau Serasa.

Speaking at a press conference, Marcos Barbosa Pinto, the ministry's secretary of economic reforms, said the proposed change would be included in an executive order expected to be sent to Congress by next week.

Simultaneously, the government intends to waive a certification requirement on the platform created for the program in an effort to increase participation, Pinto added.

"The number of people who have not yet visited the platform and have benefits there is very significant," he said.

The program has already attended 10.7 million Brazilians, renegotiating debts totaling 29 billion reais ($5.90 billion). However, Finance Minister Fernando Haddad recently underscored its potential to reach 30 million Brazilians.

In mid-July, the government launched the program's first phase, allowing banks to offer consumers the opportunity to directly renegotiate their debts.

In early October, the program was expanded with government guarantees for negotiating bank and non-bank debts, providing significant discounts for consumers earning up to two minimum wages per month.

As of now, about 10% of the 8 billion reais in Treasury guarantees have already been utilized within the program, said Pinto. ($1 = 4.9158 reais) (Reporting by Marcela Ayres; Editing by Steven Grattan)