SAO PAULO, May 6 (Reuters) - Brazilian state-development bank BNDES will invest 4 billion reais ($703.52 million) in asset managers focused on financing small companies, according to a document released on Wednesday.
The move is aimed at helping an increased number of small companies - which have been among the hardest hit by the coronavirus outbreak slowdown - weather the crisis.
BNDES said it will invest in up to 10 private credit funds, to be selected in the coming weeks. Commonly financed by institutional investors, such funds aim to provide an alternative to bank lending for companies too small to finance themselves through debt or equity offerings.
The BNDES said it could also consider investing in similar funds created by larger companies aiming to provide liquidity to their clients.
In April, the Brazilian government launched a 40 billion reais program aimed at helping small- to medium-size companies pay their employees during the quarantine. While stay-at-home measures have crushed demand at restaurants, bars, barbers and many retailers, only a quarter of the funds have been used so far.
Funds for the payroll credit line are provided by Brazil's Treasury, responsible for 80%, and the country's top three private-sector lenders: Itau Unibanco Holding SA, Banco Bradesco SA and Banco Santander Brasil SA . ($1 = 5.6857 reais) (Reporting by Carolina Mandl; editing by Jonathan Oatis)