Eight out of 10 households in Brazil are in debt, factors out CNC

It is the largest volume since 2010, when the historical series monitored by the CNC began

Family indebtedness has become a financial epidemic in Brazil. Today, The for every 100 families in the country, 79 are in debt, according to a monthly survey carried out by the National Confederation of Commerce in Goods, Services and Tourism (CNC). Most of these debts are not linked to banks, but to services in general, such as electricity, telephone and internet bills, store booklets and car and house installments.

With so much debt, the country has reached record levels of default, as many families are unable to pay their bills on time. It is the largest volume since 2010, when the historical series monitored by the CNC began.

Estadão reached out to the campaign teams of President Jair Bolsonaro (PL) and former President Luiz Inácio Lula da Silva (PT) to detail what measures each intends to adopt if it wins the second round of elections, on October 30.

renegotiation

In PT’s campaign, the idea is to create a debt renegotiation program for families and small and medium-sized companies, with the support of public banks and partnership with private banks, to offer renegotiation conditions with debtors. The main project of these actions was called “Desenrola”, which targets debts not linked to banks, but to services in general.

The 2023-2026 government plan presented by Bolsonaro makes no direct mention of the topic. From what can be deduced, from statements already made by the president and which are included in his program, the focus is to encourage the generation of jobs to revive the economy and, in this way, increase purchasing power. There is, however, no clear proposal that directly involves the renegotiation of current debts, for example.

Overdue accounts exceed BRL 289 billion, says Serasa

Brazil currently has more than 67 million people in default, according to data released by Serasa in August. The value of these debts exceeds R$ 289 billion – of which 28% are related to pending issues with banks and credit cards. Most (72%) have to do with late bills for services in general, such as electricity and telephone and store booklets.

Coordinator of the Perseu Abramo Foundation’s Public Policy Monitoring Center, economist Guilherme Mello, who worked on the preparation of Lula’s campaign proposal, says that the “Desenrola” program aims precisely at paying off debts in general. The proposal foresees, in a first stage, actions aimed at families that earn up to three minimum wages – income today of up to R$ 3,636 -, but then expand access to families with higher incomes.

“We are talking about these non-bank debts, which are the majority, about 73% of the total volume. The plan is to create credit bureaus in the country, which will be spaces for centralizing information, because these debts are very dispersed, today you don’t have this centralized data. These bureaus would be organized in partnership with the banks and also with the SPC (Credit Protection Service), Serasa, Central Bank, to negotiate these debts”, says Mello.

The idea, he adds, is to initially focus on customers who have been “negative”, whose debts are already treated as “lost” by companies.

“The plan is to offer large discounts in these negotiations, not least because a large part of these debts are interest and fines. Today this happens in some situations; but, many times, companies want to receive the entire amount at once, and families are not able to pay.”

Bolsonaro

There is no mention of family indebtedness in the 48 pages of the document delivered by Bolsonaro’s campaign to the Superior Electoral Court (TSE). The report sent questions to ministers Paulo Guedes (Economy), Fabio Faria (Communications), Ciro Nogueira (Casa Civil), in addition to the campaign command itself. There was no response as of the completion of this issue.

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