Fear of being homeless in the pandemic leads Brazilians to prioritize rent, says research

​A survey by the Intervalor credit recovery company with consumers in default situation reveals that, in the case of lack of money, the priority is to pay the rent (response of 31.5%). Next come consumer bills, such as water and electricity (26.4%) and credit card bills (13.1%).

The survey was conducted in September, with 365 respondents. Most of them (60%) are between 30 and 49 years old, have completed high school (29%) or graduated (27%), are employed (36%) or are self-employed, including entrepreneurs (37%). A slice of 18% was unemployed.

“The credit card is important, as it is used as a complement to the families’ budget. But, in a situation of lack of money, guaranteeing housing and basic conditions related to living, such as water and electricity, come first,” he told the sheet Phelipe Alvarez, vice-president of Intervalor.

The survey showed that 90.7% of respondents had their financial lives affected by the pandemic last year, a condition that remains this year for the vast majority (85.8%). The executive also points out that the financial squeeze was widespread, reaching all social classes and consumers with different levels of education.

The objective of the research, according to Alvarez, was to understand the reasons that led to the lack of financial control and the delay in paying bills. The loss of one’s job or someone in the family was the main reason for default (43% response).

The limitation to self-employment due to health restrictions affected 22% of respondents. For another 20%, the reduction in the workload compromised the budget, while 14% had medical expenses with the illness of someone in the family.

When asked about the unexpected situations that messed up the budget in the pandemic, consumers again pointed out the loss of a family job (25%), financial help to a family member or friend (20%), medical expenses (19% ), vehicle maintenance (18%), emergency home repair (11%) and even expenses with the pet (7%).

“In this scenario of default, it matters for a company like ours to know the reasons that led that person to fail to honor their commitments and how they can regain credit again,” says Alvarez.

What most impacted financial life after the pandemic (in %)

Source: Intervalor

Intervalor launched Recalibra, a debt negotiation solution. “As a concierge, the platform recommends the best payment option according to the customer’s profile, their moment of life and their needs”, says the executive. Until then, the negotiation of a debt was based only on variables from the consumer’s financial history.

“The platform helps to identify the best combination between debt discount and installment payments”, he says. “Today, on average, the inefficiency in debt renegotiation agreements reaches a rate of 60%, because they do not take into account the reality that the person is living in”, he says.

In Alvarez’s opinion, more than helping consumers to reorganize their debts, a culture of financial education is essential, so that they do not go back into debt. “The fact that BNCC [Base Nacional Comum Curricular] having recently included financial education among the transversal themes is a good sign”, he says. “Children and young people will learn more and more that it doesn’t matter how much they earn, but how much they manage to save.”