Data from Serasa Experian, relative to April 2021, showed that 56.4% of defaulted consumer debts in Brazil are paid within 60 days, mainly in the Utilities segment (67.4%) that covers expenses like water and energy. Next, is the Banks and Credit Cards sector, with 62.6% of related debts settled in the period.

These figures are from the Credit Recovery Indicator, which shows the percentage of debts paid within 60 days after being in default.

The economist at Serasa Experian Luiz Rabi evaluates that the fact that the percentages of debt recovery are lower in the last two months – March/21 (56%) and Apr/21 (56.4%) -, compared to the beginning of the year (58.8% in January and 59.3% in February), may be related to the acceleration of inflation in the period, which ends up eroding the purchasing power of the population and making it difficult to pay off debts in arrears.

He suggests that creditors provide discounts and payment facilities to their customers in debt, in order to be able to increase their recovery percentages at this time of higher-than-expected inflation.This indicator also suggests a pattern: more recent debts tend to be recovered more, while those with a longer history have the lowest percentage of discharge. Considering commitments that were 30 days overdue, 74.3% were settled; from 30 to 60 days, 42.4%; from 60 to 90 days; 31.0%; from 90 to 180 days; 28.3% between 180 days and the first year and 16.3% between one and more years

Original Story: Agência Brasil | Camila Boehm 
Photo: Photo by Magda S from FreeImages.com
Edition & Translation: Prime Yield