Delinquency advances and reaches a record 30.3% of the population in October, says survey

Pressured by high interest rates and inflation that, despite the recent truce, is still at high levels, the number of Brazilians with overdue debts has been increasing over the last few months.

In October, the percentage of Brazilians with overdue debt increased 4.7 percentage points in the 12-month period and reached a record 30.3%, against 25.6% in October 2021.

The data are from Peic (Consumer Indebtedness and Default Survey), which will be released this Monday (7) by the CNC (National Confederation of Trade in Goods, Services and Tourism), and represent the highest level of defaulters since the beginning. of the historical series, in January 2010.

The proportion of Brazilian families with overdue accounts grew from 30% to 30.3%, the fourth consecutive monthly increase. In one year, it was the biggest advance in delinquency since March 2016.

“We’ve never had such a high proportion of families with arrears,” says Izis Ferreira, CNC economist responsible for the survey.

Compared to September 2022, there was an increase of 0.3 percentage point in total defaulters in October.

In terms of income, among consumers who receive up to ten minimum wages (R$ 12,120 today) the default rate jumped from 28.6% in October 2021 to 33.1% in September 2022, to 33.6% last month.

Among those with incomes above ten minimum wages, the default rate ended October 2022 at a much lower level, at 13.7%, against 11.6% in the same period in 2021 and 13.9% in September this year.

In addition, another 10.6% of Brazilians who participated in the survey responded that they will not be able to pay their debts next month and will remain in default, compared to 10.1% in October 2021 and 10.7% in September this year.

“We have a latent problem which is the risk of this default reaching ever greater proportions, which has an impact on our ability to pay in the future.”

The CNC economist also says that, with the beginning of the offer of the payroll loan to the beneficiaries of Auxílio Brasil, and the high demand, the tendency is that both the level of indebtedness and default will increase among lower-income families. .

Although the amount of the payroll is automatically discounted by the bank, making it impossible to delay its payment, it is likely that consumers who took the loan, who will have a smaller share of the aid available, face more difficulties in paying other bills, says the expert. .

“Even with the fall in inflation and the improvement in the job market, even so, the level of indebtedness and high interest rates have made it difficult to pay bills within a month”, says Izis.

New Year Debt Brings More Debt

CNC data also indicate that the total number of indebted Brazilians — with debts on the balance sheet, although the accounts are not yet in arrears — reached 79.2% last month, an increase of 4.6 percentage points in the annual comparison. Despite the increase, this is the lowest annual rate since July 2021.

In relation to the immediately previous month, after three consecutive increases, there was a slight decline of 0.1 point.

The numbers also show that the indebtedness declined, on a monthly basis, in a generalized way among the different salary ranges, although with more intensity among those families with higher incomes – it went from 75.9% to 75.4% among consumers with higher incomes. above ten minimum wages, and from 80.3% to 80.2% among those with income of up to ten minimum wages.

In the annual comparison, consumers with higher incomes were those who registered the greatest increase in the level of indebtedness, of 5.8 percentage points, compared to 4.3 points among those who receive up to ten minimum wages.

According to the CNC economist, the first quarter of 2023 is, in particular, a period that tends to be more difficult for people to pay off all their financial obligations, when there are a series of seasonal payments — the case of IPTU and IPVA and renewals. of enrollment and school fees for children.

“We do not have a vision of a drop in delinquency in the short term”, says Izis.

The CNC specialist warns that taking a conservative stance at the end of the year, seeking to take advantage of the 13th salary payment to, as far as possible, make some savings, is essential.

“The default is not good for anyone. Not for the consumer, not for the company that offered the credit and much less for the economy.”

Credit card is villain, with more than 86% of debts

Among the main types of debt are the credit card, which leads by leaps and bounds, with 86.2% in October 2022. In the same month of last year, the indicator was 84.9%.

Then come the booklets with 19.5% (against 20.2% a year ago), car financing with 9% (compared to 12.7% a year ago), personal credit with 8.4% (9, 2% a year ago) and home financing at 8.1% (compared to 9.4% a year ago).

Spending on the card is associated with very short-term consumption, which shows that the high interest and inflation scenario has significantly affected families’ budgets, says Izis.

“They end up having to resort to credit that is easier to access to support their level of consumption, such as credit cards and overdrafts, modalities with the highest interest rates”, says the CNC economist, adding that it is also It is possible to notice a kind of diversification of indebtedness, with families taking out debts in two or three different modalities.

The payroll loan, in turn, which is among the cheapest alternatives at the time of contracting credit, lost space, going from 7% to 5% in the one-year window ended in October.

Bahia, Rio Grande do Norte and Minas lead indebtedness

On a regional basis, the percentage of consumers who delayed payment of debts grew in 12 states between September and October. Bahia (43.7%), Rio Grande do Norte (42.4%), Minas Gerais (42.2%), Ceará (41.9%) and Roraima (38.5%) recorded the highest proportions of families with overdue bills.

Among the states that had a reduction in the rate of overdue accounts, Ceará stands out. Even being the fourth state with the most defaulters, Ceará showed a drop of 4.3 points in the proportion of consumers with overdue debts, on an annual basis.

Pará and Maranhão also recorded significant drops in the volume of defaulters in one year, of 5 and 4.3 percentage points, respectively.

When considering the number of indebted persons by region, the survey shows that 17 of the 27 federative units had an increase in the item in October, compared to September.

The leadership is with Paraná, with 95.8%. Following are Rio Grande do Sul, with 91.9%, Rio de Janeiro (89.7%), Espírito Santo (88.5%) and Minas Gerais (87.2%).