Understand how the crisis affects the future of Brazilian credit
Posted: Wed Jan 22, 2025 10:23 am
Several companies are being impacted by the crisis caused by the Covid-19 pandemic around the world. Social distancing has directly affected the revenue of companies, causing significant effects on the credit market and the cash flow of organizations.
Although the real extent of the damage caused by the crisis is sweden phone number list unpredictable, it is undeniable that it will affect the future of Brazilian credit. Today, the market already operates with low liquidity, which favors the dispersion of assets.
In this time of instability, understanding and monitoring the impacts of the pandemic on the credit market is essential for the management of any business. In this article, we will analyze the future prospects for the Brazilian credit market. Stay tuned!
What are the impacts of the crisis on the Brazilian credit market?
Before the pandemic, this sector had been growing gradually, pointing to a slight recovery after the recession caused by the economic crisis that lasted between 2015 and 2016. There was a movement to reduce the interest rates offered by banks and financial institutions for loans to both individuals and legal entities, which was driven by the decrease in the Selic rate.
According to the Central Bank , financing for individuals reached 16.6% in 2019, while credit for the corporate market was 11.1% during the same period. However, with the arrival of the pandemic in March 2020, the release of credit for individuals showed a recession of more than R$ 2 billion, directly affecting the banking sector.
As a result, public banks began to seek money from other sources, offering better financing conditions to help the population. In addition, the granting of credit cards and vehicle financing during this period became extremely volatile.
In the first two months of 2020, credit between individuals related to credit cards fell by 9.9%, while credit related to debts grew by 164.6%. Emergency credit for companies, on the other hand, saw strong growth in new operations. According to the Central Bank report, this increase was 59.6% in March 2020 alone, a historic increase for the period.
Another point worth highlighting is the number of loans to legal entities. In 2020, the total number of requests was relatively higher than in previous years. From an average of R$3.5 billion in the period of March, this number practically doubled to R$6 billion.
Although the real extent of the damage caused by the crisis is sweden phone number list unpredictable, it is undeniable that it will affect the future of Brazilian credit. Today, the market already operates with low liquidity, which favors the dispersion of assets.
In this time of instability, understanding and monitoring the impacts of the pandemic on the credit market is essential for the management of any business. In this article, we will analyze the future prospects for the Brazilian credit market. Stay tuned!
What are the impacts of the crisis on the Brazilian credit market?
Before the pandemic, this sector had been growing gradually, pointing to a slight recovery after the recession caused by the economic crisis that lasted between 2015 and 2016. There was a movement to reduce the interest rates offered by banks and financial institutions for loans to both individuals and legal entities, which was driven by the decrease in the Selic rate.
According to the Central Bank , financing for individuals reached 16.6% in 2019, while credit for the corporate market was 11.1% during the same period. However, with the arrival of the pandemic in March 2020, the release of credit for individuals showed a recession of more than R$ 2 billion, directly affecting the banking sector.
As a result, public banks began to seek money from other sources, offering better financing conditions to help the population. In addition, the granting of credit cards and vehicle financing during this period became extremely volatile.
In the first two months of 2020, credit between individuals related to credit cards fell by 9.9%, while credit related to debts grew by 164.6%. Emergency credit for companies, on the other hand, saw strong growth in new operations. According to the Central Bank report, this increase was 59.6% in March 2020 alone, a historic increase for the period.
Another point worth highlighting is the number of loans to legal entities. In 2020, the total number of requests was relatively higher than in previous years. From an average of R$3.5 billion in the period of March, this number practically doubled to R$6 billion.