Brazilian public bank Caixa announced the creation of a new credit facility for low-income workers, offering small loans which can be applied for via smartphone and repaid in up to 24 installments.
With the flexible nature of these loans, with interest rates of 3.99 percent a month, the government is hoping to reach approximately 100 million clients, a part of which had previously received the administration’s coronavirus emergency aid during the height of the pandemic.
To apply for said loans, workers must go through the same smartphone app used to receive emergency aid payments and update their registration data. According to Caixa, requests will be subject to approval and made available first to those clients who already have digital bank accounts.
“We can increase this credit and reduce interest as soon as we have an idea of these people’s ability to take out loans,” said Caixa chairman Pedro Guimarães, during an event to launch the new credit facility on Monday morning.
Mr. Guimarães added that the information submitted by low-income workers may be used by other financial institutions to offer similar credit services.