Announcement of Eighty-Five Million US Dollars to Help Small and Medium Industries in Brazil on February 12, 1976

•World Bank 1818 H Street, N.W., Washington, D.C. 20433, U .A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/10 · February 12, 1976 $85 MILLION TO HELP SMALL AND MEDIUM INDUSTRIES IN BRAZIL The World Bank has approved a loan to Brazi 1 of $85 million to foster develop- ment of small- and medium-size industrial firms in different areas of the country. The Government will make available the proceeds of the loan to the National Bank for Economic Development (6NDE), for re-lending to 22 state and regional deve Jopmen t banks. These wi J 1 in turn re-1 e.nd the funds to sma 11 and medium privately owned industrial enterprises, which traditionaliy have had difficult access to term financing. It is expected that subsectors assisted through the Bank Joan wi lJ include, among others, non-metallic minerals, metallurgical, metal-mechanic and food •• industries. It is also expected that under the project the sub-borrowers will create some 40,000 new jobs, and upgrade skills of trained and untrained labor through modernization of production facilities and techniques. The support of small and medium industries will help stimulate private entrepreneurship, help balance the ownership distribution of productive assets, and foster regional decentralization of industry. The latter is one of the objectives of the Government efforts~ which it expects to achieve by strengthening the state and regional development banking system. For this purpose the Bank loan includes technical assistance to BNDE to strengthen its capability for dealing with the state and regional development banks~ and also technical assistance to strengthen the operations of those banks. The Joan is being made to the Federative Republic of Brazi 1 for a term of 12 years, including three years of grace, at 8-1/2% annual interest. BNDE wil 1 receive the proceeds on the same financial terms and conditions. BNDE wi 11 re- lend the funds, in indexed cruzeiros, to the state and regional d~~velopment banks. Interest rates to ultimate beneficiaries will be regionally differentiated. The Credit Commercial de France (Suisse) S.A., Geneva, The First Pacific Bank • of Chicago and Industrial National Bank of Rhode Island, Providence, Rhode Island, are participating in this loan for a total of approximately $1,565,000. Note: Money figures are expressed in U.S. dollar equivalents.