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Business demand for credit skyrockets in Brazil

Staff Writer |
As default rates drop in the business sector, a higher demand for credit points to an improved business environment in 2018.

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Central Bank data have revealed that, over the past 12 months, corporate interest rates have dropped 6.4 percentage points, while credit has grown 2.8%.

In the first two months of this year alone, credit approvals have grown 15.8% compared to the same period last year.

This is a positive sign of the improvement in Brazil’s economic outlook. With Brazil’s basic interest rate (the Selic) at its lowest level ever – 6.5% per year – and a low-inflation environment, it becomes easier for companies to borrow, invest and increase their output.

A half a million businesses are no longer are in default, and have found renewed breath since February last year.

Indebtedness has fallen, and so has the number of bankruptcy requests filed – 24.9% fewer in the first quarter of this year compared to the same period in 2017.

In the case of retailers, the demand for credit grew 2.38% last year, after experiencing a dramatic fall in 2016, when it dropped 13.79%.

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