New Positive Registry will boost ESC loans

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With the entry into force of the new Positive data (CP), the information relating to loans to individuals and companies are being included in the credit bureaus' databases so that they can be used for credit analysis purposes. This is the most important stage in the process, which has already begun and when it is complete, will enable each consumer or company to negotiate better conditions for access to credit based on their financial information. The higher the credit score, the greater the chances of obtaining credit at lower interest rates and with better payment conditions. It's as simple as that. At CP, it's worth remembering that water, electricity, gas and telephone bills will also be taken into account when calculating the credit score.

New Positive Registry will boost loans via ESC (Empresa Simples de Crédito)

The change in the CP was one of the so-called micro-reforms, which - together with macro-reforms such as the social security and tax reforms - aim to modernize the financial system so that there is greater competition, which should contribute, in the medium term, to a scenario of lower interest rates on loans and financing.

The aim of these reforms is to create the conditions for the market to develop and reach the level of maturity of developed countries. Of equal importance to the CP was the recent creation of the ESC, whose purpose is to give individual micro-entrepreneurs and micro and small companies access to cheaper credit. Money can be offered by anyone who starts a company for this purpose, as long as the ESC's volume of operations is limited to its share capital. This means that the ESC can only lend from its own resources.

Also according to the law, operations must be regional, with loans authorized only for businesses in the same or neighboring municipalities. There is a clear interest in regional development - an important point for cities in the interior of the country, which in some cases don't have a bank branch and which have poor access to the internet (which makes it difficult to open a current account online). In these municipalities, there is a high percentage of unbanked people. Anyone who thinks that these people without a bank account have no purchasing power is mistaken. Research by the Locomotiva institute found that there are 45 million unbanked people in Brazil, with an annual turnover of R$ 817 billion.

In this context, the Positive Registry takes on greater importance, because in a scenario of low or no access to financial products and services, the CP will be the main or only source of consultation for credit analysis, taking the lead in the financial inclusion of the unbanked and in a more accurate and fair assessment of the borrower.

The owner of the ESC will be able to use the credit score before deciding whether or not to grant the requested credit. The CP will thus serve as a driver for loans via ESCs, as it will give security to transactions by allowing the lender to know the borrower.

It is this convergence of actions, as will soon be seen with the CP and the ESC, that will allow for a more favorable environment for including more individuals and companies in the credit market. Only with broad access to credit will we have a fully developed and sustainable economy.