The Brazilian state development bank BNDES is “overbooked” and needs the private sector to step up funding in investments, according to bank president Luciano Coutinho. Lending by BNDES and other public banks has increased six times faster than credit by non-state bank this year, as the government tries to fuel economic growth.
Private lenders need to help finance investments in logistics, which will double in the coming years, Coutinho told investors in New York on Wednesday. His comments echo those of Finance Minister Guido Mantega, who also insisted the government wants private banks to take on a larger role.
“We need to offer support and share the burden because BNDES is already overbooked,” Coutinho said.
With gross debt of the second-largest emerging market rising, Mantega is courting private investment for the nation’s more than 200-billion-real (90 billion dollars) logistics program to open bottlenecks and boost growth.
Brazil doesn’t have the resources to fund the concessions Mantega said in a presentation in New York, adding that the country is counting on private banks to finance the projects.
Foreign investors will contribute 30% to 50% of infrastructure financing, and local banks’ participation give investors’ confidence, Mantega told reporters after his presentation. Industrial confidence as measured by the National Industry Confederation rebounded in August from a four-year low in July.
BNDES lending increased to 156 billion Reais in 2012 from 51 billion Reais in 2006 and is on track to reach as much as 190 billion Reais this year, Coutinho anticipated last month. Lending in the year through July climbed 50% from the same period last year, the bank said in a statement reaching 102bn Reais.
The bank also revealed that 37% of that sum, 37.8bn Reais are credits to small and medium sized companies, a sector that has had quick access to credit compared to the 17% of the year 2000.
In the last twelve months loans to industry, mechanics, transport, food and beverage increased 47% over a year ago and for infrastructure, 45%. However agriculture, because of the record crop saw loans jump 76%.