This factsheet provides an overview of the Brazilian rural lending regulatory framework for preventing illegal deforestation, its evolution and key requirements applicable to financial institutions (FIs) providing rural credit. FIs play a key role in preventing deforestation, as they finance activities that can lead to forest loss. By applying due diligence, improving data transparency, and monitoring, the financial sector contributes to efforts preventing deforestation. Especially in countries with extensive forest resources, the adoption of rural credit requirements set by FIs is crucial to avoiding environmental degradation and deforestation. Brazil has advanced by setting minimum requirements to approve rural credit aiming to prevent illegal deforestation and safeguarding its forests.
In this factsheet, we present the resolutions issued by the Brazilian Central Bank (BCB) and by the National Monetary Council (CMN)1 and their main requirements, highlighting those currently in force. We also present the normative issued by the Brazilian Federation of Banks (FEBRABAN)2, bank self-regulation, and the new procedures adopted by the National Development Bank (BNDES), which are limited to partner banks, to combat illegal deforestation. The primary objective of this factsheet is to facilitate access to information on the Brazilian rural lending regulatory framework and self-regulation that aims to prevent FIs from financing deforestation and the respective requirements currently in force for granting rural credit. It is important to emphasise that the implementation of the resolutions and initiatives presented in this factsheet has not been investigated, nor does this factsheet include recommendations on potential improvements or changes to them.
