Brazil has reintroduced a consumer debt relief program originally launched in 2023, the Finance Minister Dario Durigan said on Monday at the presidential palace. The relaunch is presented as a measure to reduce interest costs for indebted households and to free up disposable income as President Luiz Inacio Lula da Silva prepares for his re-election campaign in October.
The program is focused on individuals earning no more than five times the monthly minimum wage. Eligible borrowers will be offered discounts ranging from 30% to 90% on outstanding balances, Durigan said. According to the announcement, the measure covers multiple debt categories, including consumer, student, rural, and business debts.
Officials described the typical household outcome under the plan as an average discount of 65% on covered debts. The relaunch sets the monthly interest rate for restructured debts at 1.99% and allows repayment schedules of up to 48 months. To underwrite the operation, the program will use guarantees provided by the Operations Guarantee Fund, known by its Portuguese acronym FGO.
Durigan added that the government will make a new contribution to the FGO to support these guarantees, with authorization for an amount of up to 5 billion reais. The authorization is presented as the funding mechanism to backstop the guarantees that the FGO will extend for loans restructured under the initiative.
The relaunch mirrors the structure of the 2023 program in its mix of headline discounts, capped interest, defined repayment horizon, and reliance on a state-backed guarantee vehicle. The government's stated goals are to alleviate the interest burden on eligible borrowers and to expand their available income in the months ahead of the October election.
Program mechanics - at a glance:
- Eligibility: individuals earning up to five times the monthly minimum wage
- Discounts offered: between 30% and 90%; average household discount cited as 65%
- Covered debts: consumer, student, rural, and business debts
- Terms: interest rate set at 1.99% per month; repayment up to 48 months
- Guarantees: provided by the Operations Guarantee Fund (FGO), supported by a new government contribution authorized up to 5 billion reais
The announcement did not provide further operational detail in this briefing, such as rollout timing, enrollment procedures, or lender participation rates. Where information is limited, observers will need to wait for implementing regulations and program guidance to understand the full administrative and market implications.