Default affects 41.25 per cent of Brazil’s adult population, or 67.98 million consumers. The figure refers to the July 2024 indicator of the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil). The percentage of defaulters also increased by 0.38 per cent compared to the same period last year.

The most significant number of debtors in July was in the 30 to 39 age group (23.67 per cent). According to the estimate, there are 16.77 million people registered as debtors in this age group, which means that half (49.31 per cent) of Brazilians in this age group are in debt.

In July, each negative consumer owed an average of R$4,358.95 in all their debts. In addition, each defaulter owed an average of 2.10 creditor companies, considering all these debts.

The number of debts in arrears in July grew by 2.25 per cent compared to the same period in 2023. The figure for the seventh month of this year was higher than the annual variation seen in the previous month. Even so, from June to July, the number of debts fell by -0.57%.

Original Story: Exclusivo | Author: Michel Pozzebon
Edition and translation: Prime Yield

The default rate on credit cards, overdrafts, personal loans and other types of consumer credit should fall to 5.42% in July, according to a forecast by the Brazilian Institute of Retail & Consumer Market Executives (Ibevar) and the FIA Business School.

This figure represents a fall of 0.15 percentage points (p.p.) compared with the last real figure published in May 2024, and is an average within the range of 5.13% to 5.7% calculated taking into account a reduction in payment arrears calculated by the Central Bank (BC) – those exceeding 90 days.

In June, the National Confederation of Commerce (CNC) calculated that the percentage of Brazilians in debt remained at 78.8%, which, according to the organisation, indicates a stabilisation in the demand for credit by families.

However, the number of families that were late with their bills, as recorded by the Central Bank, reached the highest percentage since 2024, the CNC said.

Original Story: CNN Brazil | Author: Marien Ramos
Edition and translation: Prime Yield

The total number of defaulters in Brazil remained at 68.76 million in May, repeating April’s result – the highest in the survey’s historical series. This figure represents 41.79 per cent of adult Brazilians. Compared to the same month last year, the percentage of defaulters in Brazil fell slightly by 0.04 per cent. The data comes from the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil).

“Unforeseen circumstances, a reduction in income and a lack of control over the budget are major reasons for default and the priority ends up being to pay those bills that have had their services cut off, such as internet, telephone, water and electricity,” says CNDL president José César da Costa.

The survey, based on information from the capitals and inland cities of all 26 Brazilian states, as well as the Federal District, shows that people aged between 30 and 39 account for the largest proportion of debtors, at 23.69 per cent. As for the gender of defaulters, women account for 51.14 per cent and men 48.86 per cent.

When all outstanding debts are added together, the average debt of defaulters is R$4,445.19. According to the data, each negative consumer owed an average of 2.10 creditor companies. The figures also show that almost three out of every ten consumers (30.70 per cent) had debts of up to R$500, a percentage that rises to 44.72 per cent when it comes to amounts of up to R$1,000.

Original Story: Mercado e Consumo | Data: 19.06.2024
Edition and translation: Prime Yield

In a country that can’t stop having less than 70 million people with their names on the books of SPC Brasil and Serasa, the volume negotiated in the NPL (Non Performing Loans) market, i.e. the sale of defaulted portfolios by ceding companies, is expected to reach R$60 billion by 2024.

And depending on the performance of the Desenrola Brasil programme (the non-payment of the instalments of the negotiated agreements), this figure could rise even further, with more defaulted portfolios possibly being put up for sale at the end of this year.

The sale of defaulted portfolios by ceding companies ended the first three months of the year with R$18 billion in credit made available.

According to a survey carried out by Recovery, an Itaú Group company that is a leader in credit recovery in Brazil, the figures for 2024 represent growth over the first quarter of 2022, when the balance available to the market was R$14.5 billion, an increase of 28%.

Recovery manages more than R$150 billion in defaulted loans and currently has more than 35 million clients with active debts. In other words, just over half the number of people registered with Serasa.

Also according to Serasa, of the total debts of delinquent consumers negatived in January this year, 59.7% (or 6 out of 10) were regularised or renegotiated within 60 days of the reference month.

The data comes from Serasa Experian’s Credit Recovery Indicator and also shows that accounts worth more than R$10,000 were the most successful, with 70.8 per cent of payments.

The number of defaulters in the country increased further in April 2024, compared to April 2023, and reached 68.76 million Brazilians.

The indicator carried out by the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil) shows that four out of ten adult Brazilians (41.82 per cent) were in debt in April 2024.

And this greater indebtedness is also evident in micro-enterprises and MEIs. For example, the strong growth in productive microcredit combined with the increase in the number of informal entrepreneurs and the lack of financial knowledge can create a problem for those who wish to have their own business: debt.

In the last three years, up to December 2023, the number of loans released rose by 45% and, from December 2019 to the end of last year, the average value of the loans requested registered a real gain of 16.79%.

Original Story: JC Negócios – UOL | Author: Fernando Castilho
Edition and translation: Prime Yield

The Treasury says the result was ‘great’; in the market, however, the impression is that the programme has not reached its potential.

The Desenrola Brasil programme ended Monday with results below potential, although the figures are considered significant by the Ministry of Finance and analysts. Updated figures show that almost 15 million people benefited from the renegotiation of R$52.42 billion in debts in all phases of the programme.

The potential was to reach around 30 million just in the phase with a guarantee from the National Treasury, considered a priority by the government, in which around 5 million consumers took part.

Targeted by the initiative, the ‘negative’ public remained at around 70 million, but the economic team and experts believe that the programme has halted the worsening in general default. In terms of bank debts, the percentage of arrears of more than 90 days fell by 1 percentage point for those earning up to two minimum salaries – compared to a fall of 0.4 percentage points for the average individual, between July 2023 and February.

The Ministry of Finance argues that the programme had ‘great’ results, especially considering the low commitment of public money. In the market, however, the impression is that it didn’t reach its potential, especially the part aimed at the low-income population, with a Treasury guarantee, where debts had an average discount of 83 per cent.

Campaign promise

Among the reasons for the frustration, financial sector executives cite access difficulties and communication problems. But there is an understanding that, after the adjustments, only those who didn’t want to clear their name with Desenrola didn’t.

A campaign promise by President Luiz Inácio Lula da Silva, Desenrola was launched in July 2023 to settle debts contracted between 2019 and 2022 and impacted by the pandemic. Initially, it was due to end in December, but Track 1, for the low-income population, was extended twice.

At the start, participating banks cleared the names of customers who had debts of up to R$100 – benefiting 7 million people. At the same time, financial institutions began renegotiating bank debts with their own customers with monthly incomes of up to R$20,000. In this modality, 3 million people negotiated liabilities of R$26.5 billion – R$2.1 billion after discounts.

Finally, in October, the most eagerly awaited phase was launched, Track 1, aimed at the low-income population, with a Treasury guarantee in the event of default. In this stage, in addition to bank debts, debts such as electricity and water bills, educational fees or retail purchases were included.

This option was available until Monday for people who earn up to two minimum wages or are registered on the government’s Single Registry for social programmes, with debts of up to R$20,000. The instalment conditions are special: up to 60 months, with interest of up to 1.99% per month. R$8 billion was made available for the Operations Guarantee Fund (FGO), in order to guarantee any default.

On average, the discounts were 83% for a stock of R$151 billion in debts registered in the system, from 654 creditors. The potential was to reach 32 million people. Of these, 4.93 million took part in this phase of the programme, reducing liabilities from R$24.91 billion to R$3.6 billion so far. R$1.7 billion has been used up from the FGO.

«For the vast majority of people in debt, Desenrola was a great opportunity. It was a chance to rebuild their credit score for the market», summarises Rafael Baldi, director of Products at Febraban.

The most negotiated debt was related to credit cards, such as revolving credit cards, accounting for 44 per cent of agreements. The average discount for this segment was 96 per cent. The law that created Desenrola limited the amount of interest to 100 per cent of the original amount as of January this year.

«If we look at the programme as a whole, it’s a great result with minimal public resources, with great gains in regulation and cooperation between the players to enable this result» said Quênio França, Programme Director at the Ministry of Finance, highlighting the ‘innovative’ experience of bringing together banks, more than 600 creditors and a billion-dollar debt universe.

Impact of fake news

Part of the public preferred to pay cash. Of the R$14.2 billion in debts negotiated directly on the Desenrola website, R$3.1 billion were paid on the spot. In addition, the director explained that there were agreements reached through other channels. According to Serasa, negotiations on its own platform increased by almost 10 per cent during Desenrola compared to the same period last year, to 33 million.

«We do see it as a programme that worked. Of course it wasn’t going to get 72 million people out of default, but it did manage to help several families» said Aline Maciel, Serasa’s manager.

Original Story: O Globo | Author: Thais Barcelos
Edition and translation: Prime Yield

The number of defaulters in Brazil ended the first quarter of the year up 4.5% compared to the same period in 2023, according to data from Boa Vista. However, on a monthly basis, the indicator fell by 0.46 per cent in March compared to February in the seasonally adjusted series, marking the eighth consecutive decline.

In the original data series, the indicator slowed from 3.0 per cent in February to 2.1 per cent in March 2024.

This was the eighth consecutive decline in the indicator, which was already expected given the improvement in the underlying factors from month to month, especially the employment figures,’ says Boa Vista economist Flávio Calife.

Boa Vista’s Credit Recovery Indicator increased by 11.83 per cent in the first quarter of 2024 compared to the first quarter of 2023. On a seasonally adjusted monthly basis, the indicator expanded by 0.46 per cent in March, and on a 12-month cumulative analysis, it fell from 20.6 per cent in February to 19.7 per cent in March.

Credit recovery has shown strong growth in recent months, driven by the improvement in consumers’ financial conditions, with an increase in real income and a reduction in debt, as well as the debt renegotiations provided by the Desenrola programme,’ adds Calife.

Original Story: Infomoney
Edition and translation: Prime Yield

Brazilians were both more indebted and more in arrears between February and March, according to the National Confederation of Trade in Goods, Services and Tourism (CNC).

The proportion of families with overdue bills rose from 77.9 per cent in February to 78.1 per cent in March, according to the Consumer Indebtedness and Default Survey (Peic). However, the result is still lower than a year earlier, in March 2023, when 78.3 per cent of households were in debt.

“This result shows an increased demand for credit by families, taking advantage of lower interest costs,” the CNC said in its release of the study.

For the purposes of the survey, debt is defined as accounts payable in the form of credit cards, overdrafts, store bills, payroll loans, personal loans, post-dated cheques and car and house payments.

Delinquency

After five consecutive months of decline, the proportion of consumers with overdue bills rose from 28.1 per cent in February to 28.6 per cent in March. In March, the proportion of households in arrears was higher at 29.4 per cent.

“This increase in arrears is also reflected in the increase in the proportion of families who will not be able to pay their debts, which is the most complex group of defaulters, but with a difference of only 0.1 percentage points and in this case already exceeds the indicator for the same month last year,” the CNC said.

The proportion of families who said they were unable to pay their debts and therefore remained in arrears rose from 11.9 per cent in February to 12.0 per cent in March. The result is still higher than in March 2023, when 11.5 per cent were in this situation.

“In order to increase their disposable income, families have been trying to extend the deadline for paying off their debts. So much so that the time spent in debt reached 7.1 months in March 2023, the highest level since April 2022,” said CNC economist Izis Ferreira in a statement.

Poorer people drive up debt and defaults

From February to March, the increase in debt and defaults was driven by lower income families. In the group with a monthly family income of up to three minimum wages, the proportion of people in debt rose from 79.2 per cent in February to 79.7 per cent in March.

In the lower middle class, with incomes between three and five minimum wages, the proportion of people in debt fell from 79.5 per cent in February to 79.3 per cent in March. In the group earning between five and ten minimum wages, there was a fall from 75.8 per cent to 75.0 per cent. In the group earning more than 10 minimum monthly wages, the share remained stable at 71.4 per cent.

In terms of arrears, the proportion of families in arrears in the group with a monthly family income of up to three minimum wages rose from 35.8 per cent in February to 36.4 per cent in March.

In the lower middle class, with incomes between three and five minimum wages, the proportion of defaulters remained at 26.0 per cent in March, the same as in February. In the group earning between five and ten minimum wages, there was an increase from 20.5 per cent in February to 20.7 per cent in March. In the group earning more than 10 minimum monthly wages, the proportion of defaulters fell from 14.6 per cent to 14.3 per cent.

Original Story: Isto é Dinheiro
Translation and Edition: Prime Yield

Axios Capital, a holding company that owns an investment bank, a securitisation company and a business consultancy based in Poços de Caldas (MG), has announced the creation of a fund aimed at negotiating debt in the rural sector based on NPLs (non-performing loans). The fund, called Axios Special Situations I, is starting with an investment of around R$70 million, but the aim is to build up an initial capital of R$200 million.

The assets, backed by rural property guarantees, will be accumulated through the interest of professional investors, individuals and companies, with average contributions of R$10 million per shareholder. Axios is counting on the financial partnership of Stark Investment Bank, based in São Paulo (SP), a digital bank with R$2.5 billion under negotiation and R$600 million in completed transactions, according to the institution.

“Our thesis is to invest in distressed debt with a high degree of asymmetry, with the possibility of buying the assets at a significant discount and with solid coverage,” says Hugo Lopes de Barros, co-founder and CEO of Axios Group. According to the Central Bank, NPLs across all sectors of the economy in Brazil currently exceed R$400 billion in overdue debt.

In its current operations, Axios allocates 70 per cent of its investments to non-performing loans and single names, with guarantees and realisable assets guarantees and realisable equity valued at 150 per cent of the amount invested – which, in its new fund, will be backed by the value of forced sales of rural properties and other assets. The other 30 per cent of investments will normally be used to acquire judicial assets in special situations, distressed real estate assets, distressed real estate assets (i.e. overdue bank loans), credit rights (i.e. overdue bank loans), credit rights, precatórios, pre-precatórios and other lawsuits of this nature, all with final judgements.

Edition and translation: Prime Yield
Original Story: Forbes Brazil
Photo: Axios

Default rates are at their lowest level in 22 months. This is indicated by a monthly survey carried out by the National Confederation of Trade in Goods, Services and Tourism (CNC). The percentage of households in arrears closed January at 28.3%, the lowest level since March 2022.

And defaults fell more among lower-income families. The survey registered a drop of more than 3 percentage points year-on-year; 35% of families with an income of up to 3 minimum wages are in default. Despite finding it more difficult to pay, almost 30% of these consumers believe they are little in debt.

Felipe Tavares, CNC’s chief economist, believes that the figures show a positive scenario for lower-income families in 2024.

With regard to debt, 78% of families reported having debts due in January, an increase of 0.5 percentage points compared to December.

Original Story: Agência Brasil | Author: Fabiana Sampaio
Edition and translation: Prime Yield

Brazilians became more indebted between November and December 2023, while defaults improved slightly, according to the National Confederation of Trade in Goods, Services and Tourism (CNC). On an annual average, indebtedness fell in 2023 for the first time since 2019, while defaults peaked at almost a third of the population, the organisation said in its Consumer Indebtedness and Default Survey (Peic).

The proportion of households with overdue bills rose from 76.6% in November to 77.6% in December 2023. However, the result is still lower than a year earlier, in December 2022, when 78.0% of households were in debt.

“Indebtedness is fundamental to economic development, as credit is the springboard of the capitalist system,” CNC chief economist Felipe Tavares said in an official statement. “Default is a negative consequence of indebtedness, caused by the low income of Brazilians and the volatility of the country’s economy,” he added.

For the purposes of the survey, debt is defined as accounts due in the form of credit cards, overdrafts, store bills, payroll loans, personal loans, post-dated cheques, and car and house payments.

“The increase in indebtedness in the last month raises a point of attention in relation to the indebtedness of Brazilian families, given the high percentage of indebted families. Despite the high percentage of indebted families, family debt as a percentage of GDP is around 30%, which is not a high percentage compared to the US market, where family debt represents 73% of US GDP,” the CNC study added.

The proportion of consumers with overdue bills fell from 29.0% in November to 28.8% in December 2023. In December 2022, the share of delinquent households was higher at 30.0%.

The proportion of families who said they were unable to pay their arrears and therefore remained in arrears fell from 12.5% in November to 12.2% in December 2023. This is still higher than in December 2022, when 11.3% were in this situation.

Annual average

In 2023, the annual debt rate stood at 77.8% of the population, just 0.1 percentage points lower than in 2022.

“The decrease in the overall Peic indicator, although small, represents a victory in relation to the worrying evolution of household indebtedness,” says the CNC report, stressing, however, that eight out of ten Brazilians still have debt in their name.

The annual default rate will rise from 28.9% in 2022 to 29.5% in 2023. The average proportion of those who said they were unable to pay their outstanding debts also rose, from 10.7% to 12.1% over the period.

“This confirms the importance of well-structured debt renegotiation programmes, such as Desenrola, which is already showing results, with a fall in this indicator in the last quarter of the year, from 13% in October to 12.2% in December last year,” the CNC defended.

Original Story: UOL | Estadão Conteúdo
Translation: Prime Yield
Photo: Free Images /BrunoNeves