Brazil’s BNDES and the Inter-American Development Bank (IADB) have signed an agreement by which the IADB opens a credit line worth US$3bn to finance BNDES programmes aimed at supporting small and medium enterprises (SMEs).

This agreement defines the general conditions of loans between the two institutions, making future negotiations much simpler and faster.

The first loan under this line, worth US$1bn, was already approved by the Brazilian senate.

The total amount of the programme is US$6bn, 50% coming each from the IADB and BNDES. The resources will allow small sized companies acess to long-term financing for their investment projects, and therefore be competitive and capable of generating more employment.

Presently, SMEs account for about 60% of all hiring in Brazil.