POST Online Media Lite Edition



 

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.

Article continues below




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%.


What to read next

Central Bank: Brazil reacts to challenges
Industry in Brazil: 31% envision investing less
UK banks report significant fall in unsecured credit availability