Default by individuals breaks new record with 84.2 million defaulters

Defaults among individuals in Brazil reached 84.2 million people in September, the highest number ever recorded in Serasa's historical series. According to O Antagonista, the total increased compared to the 83.9 million negatives in August and has accumulated an increase of 34.17% since 2020.

According to the Default Map, also from Serasa, debts with the financial system total R$597.4 billion. Banks and credit cards account for 27.16% of total debts, while financial institutions account for 20.66% of default cases. The portion concentrated in credit institutions is the point that most interests those who follow the financial sector.

To face the problem, the Lula government published, before the first round, the provisional measure for Desenrola Brasil 3.0, the third phase of the program. The main new feature is the purchase of debt portfolios at auction, with the full discount passed on to the debtor. The MP reserves up to R$15 billion from the Ministry of Finance for these purchases, covers up to R$150 billion in eligible debts and is expected to reach up to 15 million people.

First release history helps size reach. A study by UFRJ and FGV on the original Desenrola shows that default rates fell initially and returned to previous levels within 18 months. The same work points out that the benefit was lower among informal workers and that some institutions expanded loans with renegotiations in mind.

IBRE researchers raise the hypothesis of a structural change in debt. They note that employment and income have recovered, but that high interest rates, expensive credit and greater income impairment continue to keep families vulnerable. For O Antagonista, who classifies Desenrola as a palliative medicine, renegotiation alleviates the symptom without attacking these causes, a reading that is the opinion of the vehicle and not accurate data.

What changes for the investor

For those who invest and operate, the effect depends on two channels. The first is credit: renegotiations can reduce delays in the short term and change the quality of bank and financial portfolios, but the history of the original Desenrola suggests that the relief may not last if interest rates and income do not improve. The second is fiscal, since up to R$15 billion from the Ministry of Finance destined for the purchase of portfolios enters the accounts of those who defend responsibility with public accounts, a reading that The X-Trader News shares. This text does not recommend the purchase or sale of any asset and does not project quotes.

Automatically translated from Portuguese.