Beginning today, March 21, 2025, the Brazilian federal government has launched the "Worker Credit" program, a new initiative aimed at providing payroll loans for workers with formal contracts. This program promises to offer lower interest rates backed by the FGTS, or Workers’ Severance Fund, as collateral. Now, more than 19 million workers, including domestic employees and rural workers, can access a more favorable borrowing option through the Digital Work Card application (CTPS Digital).
According to Fernando Haddad, the Minister of Finance, this initiative is designed to allow access to what he describes as "more civilized rates." He explained that these rates will vary depending on the duration of employment and the economic sector in which the worker is engaged. Unlike the previous payroll loans associated with governmental pension funds, this program does not impose an upper limit on interest rates, but banks are expected to offer lower rates due to the FGTS guarantee.
The mechanics of the Worker Credit program allow workers to request loan proposals directly from over 80 banks already participating in the INSS payroll loan system. Workers can input their essential information via the CTPS Digital app, where after authorizing access to their data, they will receive loan offers within 24 hours. Also, workers can draw upon up to 10% of their FGTS balance and 100% of any severance pay if dismissed, adding an extra layer of security.
The installment value for these loans is capped at 35% of a worker's salary, ensuring that repayments remain manageable while still providing substantial access to credit. With these new regulations, the government anticipates the average monthly interest rate for these loans to settle around 2.5%, a significant reduction compared to the existing nationwide averages.
For those already holding payroll loans, the transition to this new system becomes possible starting April 25, 2025, when they can migrate their existing contracts to the new framework. Additionally, from June 6, portability options will be activated, allowing workers to move their accounts between different banks more easily.
Initially introduced in response to a broader economic slowdown and a decrease in popularity of the current administration, the Worker Credit program is not only about providing easier access to funds; it’s positioned as a critical strategy to rejuvenate individual spending during sensitive economic times. The estimated movement of over R$ 120 billion through these new contracts could provide a tangible boost to the economy.
In summary, the Worker Credit initiative represents a significant step forward for Brazilian workers, with straightforward application processes and competitive interest rates. It offers necessary financial flexibility while complementing existing options like the FGTS anniversary withdrawal. As the program rolls out, workers will find themselves with increased control over their financial futures, presenting an opportunity for improved economic stability across Brazil.
