The Foreign Trade and Investment Bank (BICE) launched new credit lines at a discounted rate for companies that export to Brazil and signed an agreement with the Brazilian Development Bank (BNDES), with the aim of promoting projects in common with the main commercial partner of Argentina.
With a cooperation agreement and the implementation of special lines for companies that trade with Brazil, BICE focuses on consolidating the growth of exports with added value to Argentina’s main commercial partner, “to grow in production capacity and boost exports.“Said the official entity in a statement.
BICE announced an expansion to $ 5 billion of loans at a rate subsidized by the Ministry of Productive Development. The investment line totals $ 4,500 million for loans of up to 7 years with a rate subsidized by FONDEP.
Includes a $ 500 million quota exclusively for MSMEs exporting to Brazil, with an extra rate bonus of 2 points. In addition, a new line for working capital for $ 500 million was presented for SMEs that are about to make their first export to Brazil or have exported during 2019/2020.
The president of BICE, Jose Ignacio de MendigurenHe explained that the focus on companies that export to Brazil seeks to consolidate the ongoing recovery of the bilateral exchange with the country’s main trading partner.
“In recent years, bilateral trade suffered. We have to go back to the record figure of 2011, when it reached USD 40,000 million. In 2019 they had been cut in half, USD 20,000 million, ”said Mendiguren. In the first five months of the year, bilateral trade between Argentina and Brazil grew more than 30%.
The launch, carried out in the company Fibran Sur in the Buenos Aires party of Florencio Varela, was headed by the secretary of Small and Medium Enterprises and Entrepreneurs, Guillermo Merediz and Mendiguren participated; the Argentine ambassador in Brazil, Daniel Scioli; and the local mayor, Andres Watson; the director of BICE Nicolas Scioli, the president of Garantizar, Gabriel Gonzalez; and the Commercial Manager of Fibran Sur, Maximiliano Gomez.
Mendiguren highlighted “the importance of long-term financing to grow in production capacity and boost exports, especially with a focus on Brazil, the main market for our Argentine value-added exports. Today’s announcement condenses the vision we have since the beginning of our management at BICE and shows a key synergy in that agenda between the Ministry of Productive Development and the Argentine Embassy in Brazil”.
In addition, BICE this week signed a cooperation agreement with BNDES, the Brazilian development bank, with the aim of evaluating joint projects. Shortly after assuming as president of BICE, in February 2020, Mendiguren had traveled with the BICE Board of Directors to Brazil to restart the relationship with the BNDES with the aim that both development banks jointly promote bilateral productive integration. The signing was with his BNDES counterpart, Gustavo Montezano.
“From the beginning, we focused on this strategic relationship. Brazil is not only our most important commercial partner, but also the main destination for our exports of industrial products with added value and high technological content. 55% of Argentina’s exports to Brazil are Manufactures of Industrial Origin (MOI), while towards the rest of the world this percentage does not exceed 20% ”, said Mendiguren.
Together Argentina and Brazil are the sixth largest economy in the world; the fifth most populated territory; the main world soybean producers – about half of world production – and the 4th largest producer of grains; the world’s second largest shale gas reserve and the world’s eighth largest vehicle producers.
The loans will have an interest rate of the Private Badlar line + 6% annual nominal with a 12% FONDEP bonus for the first three years. In addition, the initial two years have a maximum rate cap of 24%. For specific lines for exports to Brazil, the rate discount will be 14%, with a ceiling of 22% for the first two years.
In addition, a credit line for working capital was created for $ 500 million that will finance projects of up to $ 50 million for MSMEs with a valid SME certificate, which are exporters to Brazil, during the 2019/2020 period or are going to make their first export, and that do not belong to the primary sector. They are lines with a term of 36 months and up to 6 months of grace, with a FONDEP rate bonus of 8% throughout the term.
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