Brazil says Brics bank may back anti-hunger loan guarantee fund
Brazil’s social development minister says the New Development Bank could help launch a guarantee fund by the end of the year to support cheaper loans for poor families in Africa and Latin America. The proposed pilot, potentially worth about US$200 million, would be the bank’s first financing for Brazil’s global anti-hunger alliance.
The Brics-founded New Development Bank could help launch a guarantee fund by the end of the year to support cheaper loans for poor families in Africa and Latin America, Brazil’s social development minister Wellington Dias said. The possible pilot could be worth about US$200 million. Speaking on the sidelines of the United Nations General Assembly in New York, Mr.
Dias said the chances of the first programme being operational by December were “very big”. The bank is designing the proposal with four other development lenders, although each still has to complete compliance checks. The fund would support Brazil’s Global Alliance Against Hunger and Poverty, which was launched at the G20 summit hosted by Brazil in Rio de Janeiro in November 2024.
The initiative was later left off the G20 agenda after the United States assumed the rotating presidency. The alliance has 215 members, including more than 107 countries and 14 international financial institutions, but has no independent funding and depends on members to support the programmes it brokers. The Inter-American Development Bank has pledged up to US$25 billion between 2025 and 2030.
Under the proposed model, local banks would lend to poor borrowers while the guarantee fund would cover defaults. Mr. Dias said this could reduce the perceived risk of lending to low-income families and bring down interest rates for rural and urban borrowers.
The minister said the scheme drew on Brazil’s Acredita programme, which uses a one-billion-real government guarantee fund for microcredit. The social development ministry says the programme had lent 1.7 billion reais by October last year, with a reported default rate of 0.36%. The New Development Bank, established in 2015 by Brazil, Russia, India, China and South Africa, has mainly financed infrastructure.
Although it joined the alliance in October 2024 and offered help with water, sanitation, housing and irrigation, it has not yet financed an alliance programme. Mr. Dias said China could help fill gaps created by reduced United States aid, but described this as requiring cooperation among several countries rather than action by China alone.
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