Brazilian indebted families now 65.6 percent

The percentage of Brazilian families facing debt in several modalities of credit for consumers offered by the financial market increased to 65.6 percent in December 2019.

It’s the highest level in this time series as surveyed for indebtedness and insolvency by Brazil’s National Confederation of Goods, Services, and Tourism (CNC) since January 2010. The figure unveiled today (Jan. 9) is higher than the 65.1 percent reported in November and the 59.8 percent registered in December 2018.

The percentage of families stating they are in no conditions to pay their overdue bills or debts and therefore would remain in debt dropped to 10 percent month-on-month in December, compared to 10.2 percent in November. The indicator stood at 9.2 percent in December 2018.

Regarded as the main debt type among families since the first survey was conducted ten years ago, credit card debt reached its highest value in this time series, 79.8 percent. Second come payment booklets (15.6%), with auto loans ranking third (9.9%).

CNC President José Roberto Tadros argues that the result, despite requiring attention, should not be seen as negative. In his view, since indebtedness did not come along with higher insolvency, figures indicate debt with responsibility, compatible with the income of families.

“The tendency to increase indebtedness is associated with the expansion of the consumer credit market, driven by such factors as a recent improvement in the labor market, especially in formal jobs, and a reduction in interest rates with minimal historic levels, which brought about a reduction in the cost of credit,” Tadros stated in a note.