CMN Regulates Move Brasil Program for Truck and Bus Fleet Renewal

The Bottom Line

• The National Monetary Council (CMN) has formalized new credit rules for the Move Brasil program, facilitating the modernization of Brazil's truck and bus fleets.
• The initiative offers reduced interest rates, with averages falling from 14% to 11.3% per annum, and extended payment terms up to 120 months for autonomous transporters.
• The program prioritizes sustainability, linking lower interest rates to the scrapping of older vehicles and adherence to environmental emission standards.

CMN Regulates Move Brasil Program

Brazil's National Monetary Council (CMN) has approved comprehensive new regulations designed to broaden access to credit for the renewal of the country's transportation fleet. This regulatory update formalizes the second phase of the Move Brasil program, initially launched last week, which aims to streamline the acquisition of new and semi-new trucks, buses, and other professional vehicles by individuals and companies within the sector. The program functions as a dedicated financing line, characterized by reduced interest rates and favorable conditions tailored for those seeking to replace or upgrade their professional vehicle fleets.

The Move Brasil program is a strategic federal initiative integrated into a broader government strategy to bolster the transportation sector, which is deemed critical for the national economy. By enhancing credit accessibility for workers and businesses, the government seeks to stimulate investment and operational improvements across the logistics chain. The CMN's role in regulating the program underscores the government's commitment to ensuring financial stability and equitable access to these subsidized credit lines, aligning with macroeconomic policy objectives.

Credit Access and Conditions

Eligibility for the Move Brasil program is broad, encompassing various profiles within the transportation sector. This includes autonomous transporters, such as cargo and passenger drivers, professionals affiliated with cooperatives, small individual entrepreneurs, and both road and urban transportation companies. This inclusive approach aims to ensure that a significant portion of the sector can benefit from the improved financing conditions, thereby maximizing the program's reach and impact on fleet modernization.

Financing under the program will be extended through banks and other financial institutions authorized by the National Bank for Economic and Social Development (BNDES). The BNDES also assumes a coordinating role for the overall program framework. These authorized institutions are responsible for the direct provision of credit and the individual assessment of each financing operation. The primary objective is to enable eligible professionals and companies to acquire new or semi-new vehicles under more accessible terms than typically available in the open market, thereby overcoming common barriers to fleet renewal.

Interest Rate Structure and Incentives

The CMN's regulations specifically address the interest rates charged by the funds that supply resources to the Move Brasil program. These rates are structured to vary based on two key factors: the type of borrower and the environmental impact of the vehicle replacement operation. A core incentive mechanism is the linkage of lower interest rates to higher sustainability outcomes. For instance, operations involving the scrapping of an old vehicle for a new or semi-new, more environmentally friendly model, qualify for the most favorable rates.

The CMN-defined rates for the underlying funds are as follows:

• 1% per annum: Autonomous transporters who replace an old vehicle with a new/semi-new one, accompanied by the scrapping of the old vehicle.
• 2% per annum: Autonomous transporters without an environmental counterpart (i.e., no scrapping requirement).
• 3% per annum: Companies replacing an old vehicle with a new one.
• 5.5% per annum: Companies without an environmental requirement.

In addition to these base rates, the operating financial agents apply their own fees, which can reach up to 8.8% per annum for autonomous transporters, up to 3% per annum for companies, and up to 1.25% per annum for the BNDES. Minister of Finance, Dario Durigan, announced at the program's launch that the average interest rates for Move Brasil borrowers have significantly decreased from 14% to 11.3% per annum, reflecting the substantial subsidy and favorable conditions embedded in the program.

Payment Terms and Financing Limits

Another critical aspect of the program's attractiveness lies in its extended payment terms and grace periods. Autonomous transporters are granted a maximum repayment period of up to 120 months (10 years), coupled with a grace period of up to 12 months before repayments commence. For companies, the financing term extends up to 60 months (5 years), with a grace period of up to 6 months. These extended terms are designed to alleviate immediate financial pressure on borrowers, making the investment in new vehicles more manageable and sustainable over the long term. The maximum financing value per client is set at R$50 million, allowing for significant fleet upgrades by larger enterprises.

Sustainability and Environmental Impact

A central tenet of the Move Brasil program is its commitment to environmental sustainability. To access the most advantageous credit conditions, applicants must demonstrate the removal of older, more polluting vehicles from circulation. Furthermore, the newly financed vehicles must comply with specific pollutant emission standards defined by the Vehicle Emission Control Program (Proconve). This dual focus on scrapping old vehicles and ensuring new ones meet modern environmental benchmarks is expected to contribute significantly to reducing air pollution and improving urban air quality across Brazil. The program aligns with broader national environmental goals and commitments.

Expected Economic and Sectoral Impact

The government anticipates several positive outcomes from the implementation of the Move Brasil program. These include:

• Modernization of the Brazilian Transport Fleet: Replacing aging vehicles with newer, more efficient models will enhance the overall quality and reliability of the national transport infrastructure.
• Reduction in Operational Costs: Newer vehicles typically offer better fuel efficiency and lower maintenance requirements, translating into reduced operational costs for drivers and companies.
• Decrease in Pollutant Emissions: By incentivizing the adoption of vehicles compliant with Proconve standards and the scrapping of older models, the program directly contributes to environmental protection.
• Improvement in National Logistics Efficiency: A modernized and more efficient fleet is expected to streamline supply chains, reduce transit times, and improve the overall competitiveness of Brazilian logistics.

The Move Brasil program is positioned as a key component of the federal government's strategy to strengthen the transportation sector, which is essential for economic growth and development. By expanding access to credit for both individual workers and companies, the initiative aims to foster a more modern, efficient, and environmentally responsible transportation ecosystem in Brazil.