BB creates consortium unit

The board at Brazil's biggest bank Banco do Brasil (BB) has approved the creation of a consumer goods financing unit, under an initial capital stock of 14mn reais (US$4.89mn), the bank said in a statement. The company, called BB Administradora de Consorcios, is set to begin operations in the first quarter of 2004. "Consortiums" in Brazil refer to groups of consumers all of whom want to buy a product such as a car. The group pools money each month over a predetermined number of years, and every month a certain number of cars is won via lottery by a certain number of group members. The lottery is repeated on a monthly basis until all members have received a car. BB will focus its business on the car, motorcycle and scooter industries, the bank said. The consortium business is gaining attention, because of a recent move by the central bank to regulate the industry, Standard & Poor's analyst Daniel Araujo told BNamericas.