Brazil: credit operations down 3.5% in 2016

The balance of the bank's credit operations dropped 3.5% in 2016, according to data released by the Central Bank today (Jan. 26). The balance reached $980.4 billion in 2016, which is equivalent to 49.3% of gross domestic product (GDP). At the end of 2015, this rate stood at 53.7%.

According to the bank's analysis, the drop in credit reflected the slowdown in economic activity and its impacts on consumption and investment demand, and the rise in the risk perception of the financial system.

The free credit balance, in which banks have the autonomy to apply the money raised in the market and set its interest rates, reached $491.3 billion, down 4.9% in 12 months.

Credit delinquency, which for individuals is considered after more than 90 days of delay, reached 3.9% in 2016, down 0.3 percentage point in the year. In the case of companies, it increased 0.9 percentage point in the year.

Interest

In 2016, the average interest rate for individuals reached 71.5% a year on free credit. The rate charged to companies stood at 28.2% per year last year.

Directed credit

In the case of directed credits (loans with government-defined rules, basically used for housing, rural, and infrastructure sectors), the balance reached $489 billion, down 2% in the year.

The interest rate with directed credit used by companies reached 11% per year. In the case of households, the rate stood at 10.4% per year.

Translated by Amarílis Anchieta