Default rates see biggest increase since March 2010
Data from Serasa shows that non-payments increased by 8,2% in May compared to April.
Consumer defaults rose 8,2% in May compared to April, representing the largest monthly increase since March 2010, according to data released today by Serasa Experian, a company specializing in credit analysis. Compared to May of last year, consumer defaults increased 21,7% in the fifth month of 2011. From January to May of this year, the accumulated increase is 20,6% compared to the same period in 2010.
According to economists at Serasa Experian, the increase in defaults reflects rising interest rates and the federal government's measures to restrict credit and control inflation. The institution also states that spending on Mother's Day gifts and debts exceeding repayment capacity have worsened the situation for consumers.
"Brazilians continue to accumulate debt, mainly in the acquisition of durable goods, which have higher added value, long repayment terms, and more expensive forms of credit, such as revolving credit card debt and overdraft facilities," the institution said in a statement. Economists also noted that May had a greater number of working days compared to April, which contributed to the increase in default rates.
DEBTS – All indicators surveyed by Serasa Experian showed an increase between April and May, but delinquency with banks was the main driver of the overall indicator's growth, accounting for almost half of the index. In a monthly comparison, delinquency with banks rose 9,7%. Delinquency related to non-bank debts (credit cards, finance companies, stores, and service providers such as telephone and electricity) increased by 5,1%. Delinquency with checks rose 11,5%, and protested bills increased by 20,7%.
The average value of debts with banks in the first five months of 2011 was R$ 1.292,01, representing a decrease of 3,8% compared to the same period in 2010. In the same comparison, the average value of non-bank debts was R$ 314,74, a decrease of 19.8%. However, the average value of debts resulting from bounced checks (R$ 1.302,49) and protested bills (R$ 1.279,84) increased by 6,7% and 10,2%, respectively.