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The first default databases emerged in the 1950s and had a local reach, limited to a small group of stores in the center of São Paulo and their local residents. consumers. With the advance of mobility and regional integration, these databases have become nationalized, made possible by technological development and digitization.

Fundamental parts of the Brazilian credit market, the databases administered by the credit bureaus  democratize access to information, reaching the most remote parts of the country with credit and risk analysis tools for small traders, retail chains and regional financial institutions. This makes it possible to grant safer and therefore more sustainable credit.

In addition to information that facilitates the granting of credit, the service provided by the bureaus involves fraud prevention, the promotion of local debt renegotiation events, which allows delinquent consumers to clean up their financial lives and regain access to consumption.

In the credit market, historically, consumers and companies in urban centers have had more access to loans, financing and financial services in general. A recent publication by the Central Bank suggests, however, that there is a process of geographical deconcentration of credit in the country.

According to the study, over the last ten years there has been a reduction in the geographical concentration of credit to individuals, in line with the fall in the geographical concentration of formal employment. The same phenomenon was observed in credit for micro-enterprises. This means that credit is equally available to consumers and companies near and far from large urban centers. The remarkable capillarity of credit bureaus contributes to this democratization of access to credit.

Throughout the pandemic, the advance of the credit has been widely publicized. In general, the figures presented refer to the country as a whole. Considering the total credit balance by region, i.e. the balance of all loans and financing carried out by the financial system, it can be seen that credit advanced strongly from North to South.

In the comparison between July 2021 and the previous year, all five regions of the country showed double-digit growth in the credit balance. In some regions, credit advanced more than in others, but the fact is that all showed significant growth. According to data from Central Bank, The North region stood out, with nominal growth of 26% in the total credit portfolio. The lowest growth was in the Southeast, although the advance was still 15% in nominal terms.

The economic particularities of each region change the profile of the credit granted. Also according to the monetary authority, considering the second quarter of the year, real estate loans stood out in the South and Southeast. Payroll loans made the most progress in the North and Northeast, while in the Midwest, rural financing showed the most significant variation, reflecting the importance of agribusiness in the region.

The digitalization of financial services, with less and less intermediation by physical branches, and the capillary supply of credit information that makes the financial system safer will continue to stimulate the deconcentration of credit and economic growth. A more recent factor also contributing to the expansion of local credit are the Simple Credit Companies, These loans allow individuals to lend funds to small businesses in their own municipality or in neighboring towns.

Given the differences between local economies, it can be confirmed that credit favors the development of each region's economic potential, creating opportunities for people and helping to reduce regional and social inequalities.

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