Default amongst these with decrease revenue is the very best within the historic collection, says CNC
- December 7, 2022
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The volume of consumers who are unable to pay overdue debts from previous months increased in November, reaching 10.9% of the total number of families. Among those with lower incomes, the indicator maintained an upward trend, reaching 13.4% of families that will remain in default.
Research on Consumer Indebtedness and Default released by the National Confederation of Commerce in Goods, Services and Tourism (CNC) shows that 30.3% of Brazilian families have some debt in arrears, as they were unable to pay on time. In one year, defaults increased by 4.2 percentage points, affecting mainly those with lower incomes.
Among consumers with up to 10 monthly income salaries, 34.1% delayed debts, the highest proportion of the historical series, started in 2010.
“The budgets of lower-income families remain tight because high interest rates increase the financial expenses associated with ongoing debts. With a higher level of indebtedness, it is more difficult to pay all commitments on time, consumer bills and debts”, explains the CNC economist responsible for the research, Izis Ferreira.
As a result, the volume of consumers who revealed that they were not able to pay overdue debts from previous months grew in November, reaching 10.9% of all households. Among those with lower incomes, the indicator maintained an upward trend, reaching 13.4% of families that will remain in default.
Defaulters for more than three months increase
The number of people reporting delays in paying off debts for more than 90 days worsened in November. Of the defaulting families, 42.5% are overdue for more than three months, a monthly increase of 0.6 percentage points and 1 percentage point in the annual comparison.
“Not by chance, the bank spread, which is the difference between the interest that banks charge on loans and those received when raising investment funds, reached the highest level since July 2019, 44.4 percentage points, according to October data. of the Central Bank”, analyzes Izis Ferreira.
According to her, the value earned from the spread is used by financial institutions to cover, among other expenses, expenses with bad debt, which has been revised upwards by companies that operate credit in the country.
Increases the commitment of income with debts
There was an increase in the number of consumers with more than half of their income committed to paying debts – in November, it reached 21.6% of total debt, an annual growth of 0.8 pp
“On average, Brazilians had to spend 30.4% of their entire income just to pay off debts in November, not counting services and consumption bills such as water, energy, telephone, gas, among others. In other words, for every BRL 1,000 of income, an average of BRL 304 is committed to debt”, evaluates Izis Ferreira.
Over-indebtedness on the rise
The proportion of families that consider themselves heavily indebted reached 17.5% of all households in November, a monthly increase of 0.2 percentage points and 2.7 percentage points in the annual comparison.
The worsening is more expressive among women (with an increase of 3.3 pp) than among men (increase of 1.9 pp), in 12 months.
The female audience is currently the most indebted: 80.7% had some type of debt in November.
The perception of over-indebtedness also increased, especially among consumers over the age of 35 – 19.5% said they were heavily indebted, an annual increase of 3.2 percentage points. Those who are under 35 years old had an increase of 2.1 percentage points and are 15.3%.
With regard to education, people without complete secondary education make up the group in which over-indebtedness grew the most in one year, with an increase of 3.9 percentage points (19.4%).
Proportion of debt falls
On the other hand, the percentage of families that reported having debts falling due dropped by 0.3 percentage points in November, reaching 78.9% of the total. In comparison with November of last year, however, the proportion of indebted people increased by 3.3 percentage points, but in a decelerating dynamic. This annual rate is the lowest since June 2021.
The deceleration in the proportion of indebted individuals is explained by the positive evolution of the labor market, by more robust income transfer policies and by the drop in inflation in recent months. According to CNC president José Roberto Tadros, this set of factors resulted in an increase in disposable income.
“Even with the scenario of improvement in the labor market, consumers remain cautious about contracting new debts at the end of the year, both due to the high level of debt and income commitment and the interest rates, which remain high”, he points out.