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Brazil's lower house passes severance-backed loan plan

RIO DE JANEIRO (Reuters) - Brazil's lower congressional house passed a plan late on Tuesday to allow workers to use part of their severance benefit as collateral for loans in a bid to rekindle demand for credit in the recession-stricken economy.

The measure aims to unleash billions of reais in new so-called payroll deductible loans using severance from the FGTS compulsory savings program as a guarantee.

The proposal will now go to the Senate for approval, a note on the Congress website said.

(Reporting by Stephen Eisenhammer; Editing by Lisa Von Ahn)