Commercial loans no longer biggest credit segment in Brazil
Credit extended to households in Brazil surpassed credit to companies for the first time ever last January.
Loans to companies fell from 52.6% of total loans at the end of last year to 49.1% at the end of January. At the same time, household credit increased from 47.4% to 50.9%, local paper Estadao reported, citing research from José Roberto Afonso, of the Getulio Vargas Foundation.
The research shows the decline in credit to companies is mainly due to two factors: firms that have excess capacity and do not require additional credit and distressed companies seeking new financing but cannot obtain it.
A third factor, according to economist Roberto Luis Troster, is that some owners of distressed companies have begun to request credit as individuals as a way to obtain some kind of financing.
"You cannot expect an economic recovery if credit of companies does not pick up," Luiz Rabi, economist at credit information firm Serasa Experian, was quoted as saying by Estadao. Brazil saw last year a record 4.8mn companies in default, Rabi added.
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