Created to invest in projects, the bank faces criticism for retaining resources.
The National Bank of Social and Economic Development (BNDES) in Brazil is an institution that aims to finance projects, in order to nourish social and economic development in the country. However, companies are unsatisfied with its model, as the bank announced that it holds funds over R$ 100 billion.
As Brazil undergoes an economic crisis, business owners claim that these resources could be utilized to infuse projects in the country with resources, thus promoting the creation of new jobs and fueling economic growth.
According to a member of the office of the president Michel Temer, the BNDES is jeopardizing the recovery process of the Brazilian economy, by retaining these resources. Another source, however, reckons that a change in the management of the bank may be the cause of the accumulation of funds, as many processes needed to be reviewed by the new CEO, Maria Silva Bastos, who took office in June, 2016.
Maria held a meeting on February 21st with the Brazilian President Michel Temer, in order to address the situation. On this occasion, she claimed that, regarding the financial situation of the country, the worst is in the past and it is possible to foresee an improvement in the economy.
According to the CEO, BNDES has an essential role in the investment of key areas for the development of the economy, which are, agriculture, infrastructure, oil and gas. Additionally, she defended the investments the bank has made in these segments, claiming that they will create more productivity in the country.
Moreover, the director of the sector of loans of BDNES, Claudio Coutinho Mendes, claims that the bank is open to provide financial support to individuals with solid projects. “There will be money for good projects”, he says, but he also affirms that the demand for financial support is below average, as a consequence of the recession the country is undergoing.
The director of planning and research of the bank, Vinicius Carrasco, claims that it is working towards supporting the sector of infrastructure, which has many projects ready to be financed.
According to the bank, the availability of resources has grown over the end of last year, as Petrobras issued a prepayment of approximately R$ 20 billion in December, 2016, to cleanse its debt with the BNDES. The payment regarded three contracts between the bank and Transportadora Associada de Gás S/A (TAG), a wholly-owned subsidiary of Petrobras.
The numbers of the new management, initiated in June, 2016, show that there has been a decrease of 17,2% in the solicitation, while the approval for financial support has gone down in 41%. These figures explain why the BNDES is currently facing criticism for its management, as the number of approved financial support has decreased twice as much as the requests the bank has received.