Brazilians are well-acquainted with dividing payments into instalments, a practice prevalent in both traditional retail credit (known as "crediário") and credit card payments. The compounding effects of inflation, a challenging job market, and reduced consumer purchasing power are pushing individuals to seek credit.
Since the emergence of the pandemic, millions of Brazilians across various age groups and social backgrounds have transitioned to digital platforms, such as internet banking and smartphone apps, for their financial transactions. With the introduction of Brazil's open banking system by the Central Bank in February 2021, consumer credit options in the country are poised to become more competitive and personalised.
Two start-ups within Banco Santander’s ecosystem have seized an opportunity facilitated by the bank to target consumers interested in real estate purchases but lacking sufficient capital. Loop, a platform specialising in assessing and auctioning repossessed vehicles due to financing defaults, is leveraging its expertise in valuing used cars.
One of the most contentious debates in Brazil focuses on the potential elimination of interest-free instalment payments on credit cards as a measure to tackle the issue of revolving credit defaults, driven by excessively high annual revolving interest rates that can reach a staggering 430%. Leading banks advocate for restricting these instalment plans, attributing them to the surge in defaults and steep interest rates.
In Brazil, aside from the imperative need for economic recovery, there is a pressing call to enhance financial literacy. This is seen as pivotal in enabling Brazilian consumers to effectively manage their existing debts and access new loans in the years to come.
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Understand the latest market trends and future growth opportunities for the Consumer Lending industry in Brazil with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Consumer Lending
Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.
See All of Our DefinitionsThis report originates from Passport, our Consumer Lending research and analysis database.
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