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Economy in Brazil: Four in ten Brazilians default their loan payments

According to SPC Brazil and CNDL, there are 55.3 million Brazilians in debt. In April/2015, the number of borrowers rose by 3.77%, added retailers.

Four in ten Brazilians defaulted their loan payments in April/2015, a contingent of 55.3 million people, according to estimates released by the Credit Protection Service (SPC Brazil) and the National Confederation of Shopkeepers (CNDL).

The number of customers with default loans advanced 3.77% against the same month last year, equivalent to 600,000 new borrowers. The total number of defaulters, 55.3 million, equivalent to 38% of the population between 18 and 95 years. The calculations include all types of overdue debt, not only with the retail trade. Clients of no credit check have had some success in getting their finances under control but it remains a very tough situation for most of the customers.
“You have more than the fiscal adjustment [tax increases and spending cuts, as investments] affecting the default. There is a lack of planning culture. The Brazilian often yield to the easy finance to do some shopping. We always indicates that prefer cash payment. When things are going well, [the effect] is not as evident in default. But when we see a year like 2015, when things are going slowly, end up with rising defaults, “he said the chief economist at SPC Brazil, Marcela Kawauti.

Consumer Behavior in Brazil
Consumer Behavior in Brazil


The indicator of arrears — not defaulters — rose 2.83% from March to April, the highest for the last month since the start of the series in 2010. Compared to April of the year past, there was an increase of 5.02% – which shows acceleration, since the increase in March was 3.46%.

According to the president of the CNDL, Honório Pinheiro, high default rates, and the lack of Brazilian planning, it is also a reflection of the macroeconomic scenario, with deceleration of gross domestic product (GDP) and rising unemployment. “We also have some measures of fiscal adjustment that is underway, part approved by Congress,” he noted.

In March, each consumer registered in the SPC Brazil database had on average 2,08 arrears, number who advanced to 2.11 arrears in April. This is the highest level for the average number of dívdias overdue since September 2012.

Telecommunication leads segment with arrears

According to CNDL and the SPC Brazil, the telecommunication segment leads the number of pending issues. In April, there was an increase of 12.10% in defaults in this sector.

The second major change, which had been occupied by arrears with water and power utility bills, has been replaced by the banking sector last month. In April, the arrears with banks accounted for 7.5% of the total, and the water sector and light 5.02%. Debts to trade fell 0.32% last month.

The numbers of CNDL and SPC Brazil also show that the banking sector leads the stock of arrears, with 48.4% of the total volume of overdue payments, followed by retail, with 20.10% of the total.

“The research tells us that what brings consumers to bad debt are credit card and overdraft. If defaulted, try to solve this debt as soon as possible. The debt grows very fast. Even if this requires some kind of negotiation, proposal, “said Kawauti, from SPC Brazil. The Brazilian Central Bank figures indicate that the overdraft interest and credit card are among the market’s largest.

Source: G1 – Four in ten Brazilians default payments, estimated retailers – news Your Money

By Itamar Medeiros

Originally from Brazil, Itamar Medeiros currently lives in Germany, where he works as Lead Product Design Strategist at SAP and promotes User Experience Design as visiting lecturer at Köln International School of Design. Working in the Information Technology industry since 1998, Itamar Medeiros has helped truly global companies in several countries (Argentina, Brazil, China, Germany, Hong Kong, India, Mexico, The Netherlands, Poland, United Arab Emirates, United States) create great user experience through advocating Design and Innovation principles. During his 7 years in China, he championed the User Experience Design discipline as User Experience Manager at Autodesk and Local Coordinator of the Interaction Design Association (IxDA) in Shanghai

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