Banco Nacional de Desenvolvimento Econômico e Social will set a ceiling for dividend distributions to companies that take out loans tied to the country's long-term TJLP rate when they are investing in projects financed by the state-run bank, Reuters reported, citing BNDES CEO Maria Silvia Marques.

"Our idea is to set a restriction on dividend distributions over 25% for TJLP-funded projects. In a subsidized-driven loan, we need to ensure that this resource is in fact investment-related," Marques was quoted as saying.

Under the law, publicly traded companies must distribute at least 25% of its profits through dividends to shareholders, but there are cases where BNDES' borrowers would be raising this level during the investment phase, which could delay or compromise the execution of some projects, the report said.

"If the entrepreneur wants to distribute more than 25% during the grace period, he can migrate to market rates or take out the loan and distribute his dividend," she added, noting that further details, including exception cases, will be announced in January.

The state-run bank should also announce between the first and second quarters of 2017 partnerships to expand BNDES' distribution network to serve primarily micro, small and medium-sized enterprises, according to the Reuters report.

Meanwhile, Marques said that Brazil has reached a level of exhaustion for its credit expansion model and government spending that in previous years bolstered the country's GDP, Valor Econômico reported.