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Banks considering grace period for payroll loans

Brazilian banks study offering grace periods for payroll loans (also known as consigned loans, where the borrowers’ wages are pledged as collateral and payments are discounted from paychecks). Brazilian Bank Federation (Febraban) Chairman Isaac Sidney said lenders are trying to overcome operational problems before launching the measure. “Unlike other lines, consigned credit involves thousands of municipal governments, thousands of companies and states which process payrolls,” he said. Central Bank data puts the outstanding balance of such loans at R$393.4 billion in February, with civil servants making up R$227.6 billion.

Source: Valor Econômico

http://www.valor.com.br/international