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Caixa CEO: Workers tap into FGTS funds to pay 368M reais in debt

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Caixa CEO: Workers tap into FGTS funds to pay 368M reais in debt

Caixa Econômica Federal CEO Gilberto Occhi said 24,000 people have used their inactive FGTS severance fund accounts so far to pay off debts of 368 million Brazilian reais with the bank, Valor Econômico reported.

The payments have made an impact on the state-run bank's delinquency rates, but it is not a significant amount due to the size of Caixa's credit portfolio, which is at 709 billion reais, Occhi said. The Brazilian government opened up the inactive accounts in March in efforts to boost the country's GDP by a 0.5 percentage point, the publication noted.

Caixa may offer rates lower than the 3% it already applies to loans guaranteed by the FGTS to further spur lending, Occhi added.

The government reportedly expects some 4.8 million eligible workers to withdraw about 35 billion reais from inactive FGTS accounts.

As of April 5, US$1 was equivalent to 3.09 Brazilian reais.