It is R$ 30 billion in subsidized credit to finance cars and motorcycles, about one hundred times the R$ 300 million jackpot of Brazil's Lotofácil da Independência lottery draw this week. President Luiz Inácio Lula da Silva of the Workers' Party signed the law on Monday (14) extending the Move Brasil Taxi and Apps program, which serves taxi drivers, ride-hailing drivers and delivery workers. School van drivers join for the first time, though the rules for that group still depend on the National Monetary Council, the body that sets credit rules in Brazil.
The program was created in May by provisional measure, a temporary decree the president can issue and Congress must approve, and it would have expired on Tuesday (15) without the signature, according to Folha de S.Paulo (G1 records a continuation measure issued in June). The lower house passed the bill in late August with changes and the Senate approved it the next day. With the sanction, the credit stays available until funds run out, and General Secretary Guilherme Boulos called the program a permanent public policy.
What the law changes
According to G1, the law allows financing of cars priced up to R$ 200,000 running on ethanol, flex-fuel, electric or hybrid engines, in up to 84 monthly installments, which means seven years of payments; Folha reports the law also covers used vehicles. Interest rates are 12.6% a year for men and 11.5% for women. To qualify, ride-hailing drivers need six months of active registration on a platform and at least 100 rides in that period, fewer than four rides a week on average, down from a previous registration requirement of 12 months.
In plain terms: the credit is subsidized because the government takes on part of the risk. The law lets the Fundo de Garantia de Operações, a public guarantee fund, cover up to 100% of each loan in case of default, which lets the BNDES, Banco do Brasil and Caixa offer cheaper rates to workers without fixed, documented income. For those who live behind the wheel, the benefit shows up in the monthly payment.
The ceremony and what comes next
At the ceremony, Boulos said drivers "are paying less on the installment than they used to pay to rent the vehicles". Lula said that in the delivery business, "deep down, the ones who earn the least are the ones who work", and that the policy helps Brazil "stop being a developing country and become a developed one". Delivery worker Evelin Samanta de Souza Cornia, known as Likinha and linked to the Movimento dos Trabalhadores Sem Direitos, thanked the government but pressed for a minimum fee of R$ 10 per delivery, an old demand of the category that has not been implemented.
Definitions are still pending: the Finance and Trade ministries will set the eligibility criteria for vehicles, and the National Monetary Council will detail the terms for school vans. The law also provides for balloon payment schedules (smaller installments during the contract and a larger final payment), financing of adaptations for drivers with disabilities and a cap of one vehicle per driver. Car insurance can be folded into the loan.