($1 = 5.2619 reais) (Reporting by Marcela Ayres and Bernardo Caram Editing by Brad Haynes and David Gregorio)
By Marcela Ayres and Bernardo Caram
BRASILIA, March 13 (Reuters) - Brazilian President Luiz
Inacio Lula da Silva's vow to renegotiate consumer debts has
missed deadlines due to a series of technical issues and open
questions about the role of the private sector, six people
involved in the talks told Reuters.
The so-called Desenrola program, first scheduled for launch
in February and then early this month, has now been delayed
indefinitely according to the sources, who requested anonymity
to discuss confidential government deliberations.
The program aims to provide relief for some of the 70
million Brazilians blacklisted due to unpaid bills after
interest rates climbed to a six-year high. It faced skepticism
from the finance sector during last year's presidential
campaign.
The Finance Ministry did not respond to request for comment.
Last week, Finance Minister Fernando Haddad said the program
should allow some 37 million people to renegotiate some 50
billion reais ($9.5 billion) in debts. During the campaign,
advisers said they aimed to tackle up to 95 billion reais of
unpaid bills.
Last week, Haddad attributed the program's delays to the
development of a digital platform for debt renegotiations.
Four ministry officials said discussions about the platform
had not reached a consensus about its design or functionality.
Another source familiar with the matter said there was still
debate about the composition of a working group including
government officials, banks, creditors and credit bureaus to
iron out details. With input from that group, the government
should be able to implement the program in the second half of
the year, this source said.
"Will people access a website? Where will this website be?
How will they find out how much they owe and to whom? This is
not well-designed," said the source.
Also yet to be determined is the cutoff date for debts
eligible for renegotiation, meant to prevent people from
deliberately defaulting on current payments.
Officials are also looking at how to structure auctions with
creditors such as banks, retailers and utility companies, which
would define which proposals qualify for guarantees from a
federal fund of 10 billion reais in the renegotiation process.
In theory, banks would then settle debts directly with other
creditors and work out a payment plan on the reduced debt load
with individuals, offering more favorable terms such as 2%
monthly interest over five years, for example.
Sources said the dynamic of those negotiations and specific
terms are still being defined for a first tier of the program,
addressing debts of up to 5,000 reais for individuals earning up
to two times the minimum wage per month, or 2,600 reais.
In the second tier of the program, debts of any value from
individuals of any income could be negotiated without government
guarantees, generating additional uncertainty about the
viability of these operations for financial institutions.
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