The “stepping stones”

Even Finame had a lower demand in the last year, showing that not even the possibility of financing with lower interest rates will reduce the impact of the lower economic growth

In Brazil, it is usual that the manufacturers use their own banks to intermediate financing of Yellow Line equipment with the National Bank of Economic and Social Development (BNDES), since they offer special conditions of payment to their customers. But even with these ways, the economy presented obstacles to those which wanted to renew their fleets.

According to the Caterpillar Bank, for example, financing market would reduce about 10 percent in 2014, compared to the former year. Data of BNDES pointed to a worse scenario for civil construction market. According to its survey, heavy equipment for that market had a lowering of 27.5 percent in financing, compared to the first half of 2013.

In addition to the low economic growth of the country, one of the causes of this lowering may be the change in financing conditions for machine and equipment in the Financing Support Program (Finame-PSI). Interest rates offered by BNDES, that were of 3 percent per year increased to 4.5 percent per year in operations closed with small companies. And this is one of the markets that most increase in Brazil, corresponding to a huge component of buying impulse for equipment with nationalization index above 60 percent.

But not even the large corporations—with income above R$ 90 million—had benefits. For them, financing rates of BNDES passed from 3 to 6 percent per year, what makes difficult the fleet renewal of large companies. “Therefore, many beneficiaries used the better rates of 2013 to renew their equipment, anticipating acquisitions foreseen for 2014”, reports the bank. Its expectation was that financing would remain neutral till the end of the year, partially due to the postponing of investments to November.