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Fausto Macedo Blog - Estadão

It is indisputable that the performance of the credit, in 2020, was one of the main instruments used to prevent the Brazilian economy from falling further in the face of the pandemic - and, at the same time, to allow a rapid resumption of economic activity from the second half of the year. In fact, the consolidated credit portfolio of the National Financial System grew by 15.5% last year, driven by a 21.8% rise in loans to companies and a 10.9% expansion in loans to individuals. This was the highest rate of credit growth in the last eight years.

Several factors were at the root of this vigorous growth, almost all of which were related to the monetary measures adopted to combat the adverse economic impacts of the pandemic: reduction of the Seli ratec to historic lows; release of compulsory payments and relaxation of measures macroprudential aimed at expanding liquidity; creating credit lines for working capital under special conditions; strengthening guarantee funds to facilitate access to credit for micro and small companies; transferring income via emergency aid, among others.

But beyond the official measures anti-crisis that have turbocharged the credit last year, some market measures were also relevant. For example, the postponement - albeit temporarily - of the deadline for credit bureaus to deny debts, which facilitated and enabled a broad movement of debt renegotiation. In addition, with interest rates at historic lows, discouraging investments in fixed income, real estate was once again seen as a medium and long-term investment alternative, and so we saw a strong expansion in real estate credit.

It is also worth mentioning that the new Positive Registry, by making it possible to better assess credit risk by improving the calculation of credit scores, has contributed to reducing the interest paid by borrowers, as well as stimulating access to credit and increasing competition between financial institutions. In fact, if we consider the balance sheets released as of September 2020, the share of the five largest banks in the total credit portfolio was 65.6%, the lowest concentration percentage in the last five years, but still far from ideal.

Given the above, the big question that remains is: how will credit behave in 2021? The answer to this question necessarily involves a hypothesis of what the economic scenario will be like in the year that has just begun. In this respect, our basic scenario envisages a process of continuity in the economic recovery that began in the second half of last year, albeit at a slower pace. Of course, as the immunization of society progresses, and the various economic agents and sectors gradually return to a more normal operating context, the entire anti-crisis arsenal adopted in 2020 will be dismantled.

So even if the rate Selic rises a little, in order to ensure compliance with the inflation target, even if defaults rise a little, given the end of emergency aid still in a context of high unemployment, and even if emergency credit lines are no longer renewed, market forces - improvement in the level of consumer and business confidence; gradual recovery in the level of employment; continued expansion of real estate credit; dissemination of the effects of the Positive Register; and implementation of the Open Banking - will provide another very positive year for the credit market in 2021.

Of course, we're unlikely to repeat last year's increase of just over 15%, but growth of close to 10% in the credit market in 2021 is perfectly feasible. And the two large portfolios - individual and corporate - should grow much closer together, unlike in 2020, when the latter's portfolio grew almost twice as much as the former.

In short, 2021 promises to be another positive year for the credit market, which continues to improve, given the spread of recent innovations (such as Cadastro Positivo and Open Banking), which allow it to operate at increasingly efficient levels, which is fundamental to guaranteeing the sustainability of our economic growth.

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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor