Credit & Financing

"Increasing your access to credit through contacts"

 

Brazil is a country where contacts and recommendations are very important. Let us put you in touch with a number of bank managers of which you can then select the best one for you.

 

  • Arrange a meeting with a bank manager

If you would like to open a bank account or obtain a line of credit for your company or yourself, please fill out our business contact form including preference of bank, if any.

If you have a preference regarding which bank's services you would like to use, please include that in your message.

 

Availability of Credit

In the past, getting credit in Brazil wasn’t easy, and it still isn't to be honest if you make a comparison to the United States or Europe. It is, however, easier than it was. The booming economy has contributed to the increased availability of credit. Banks in Brazil are more willing to give credit to businesses now as nothing but prosperity can be seen in Brazil’s near future. The credit-to-gross-domestic-product ratio was less than half that of the United States and less than a third that of England, that gap has closed substantially. This is due to measures such as the “Cadastro Positivo” where loan defaults are made public, which has resulted in a lower default rate and subsequently an increased willingness to lend. Lack of availability of credit with reasonable interest rates continues to restrict economic growth in Brazil through the lack of financing for business expansion; it is a huge potential market that, if the interest rates drop, will cause enormous growth in both the banking sector and the economy.

 

Obtaining Credit

Obtaining credit in Brazil as a foreign company or foreigner can be a difficult process. Banks in Brazil tend to be less willing to open lines of credit for recently opened foreign companies or foreigners who have recently obtained their visas than they would be in some other countries, this is largely due to a combination of the banks protecting themselves from bad debts and favoring long term clients with proven income track record. There are, however, ways to obtain credit in these situations depending on the situation. If your company has strong financial backing it makes obtaining credit easier. Also, a good relationship with an account manager goes a long way in Brazil. We have connections with several account managers in Brazil, whether you are seeking to open a company account or simply an account for personal use, we can put you in touch with the account manager at a bank suited to your needs. As these account managers are more used to dealing with foreign clients than most, the process is therefore made quicker and easier.

If you or your company acquires an existing company in Brazil you can also inherit their credit record with the bank. Provided that this credit history is viewed well by the bank, you could be able to obtain a higher line of credit to expand your operations than you would with a start up.

 

 

Credit Interest Rates

The interest rates for credit, however, remain crippling. While interest rates have dropped, Brazil still has one of the highest interest rates on credit in the world.  Consumer credit institutions, many owned by large banks, prey on cash strapped customers, charging up to around 7% interest per month.  Mortgage rates seem to vary between 10-15% at the time of writing and overdrafts 7-9%.

 

Investment interest rates

There is another side to the coin, the interest rate you receive on your investments in Brazil make investments such as term deposits in countries in countries in Europe and the United States. Brazil is a country that favors those who have money more than those who need to borrow it. See our page on investor protection for more information on how to safely get great returns on your money in Brazil.

 

Effects of the Elections

At the end of October 2010, Dilma Rouseff was elected President of Brazil, defeating José Serra about 55 to 45 percent. This means that the banking sector will probably remain relatively free of reform when compared to Serra’s proposed banking reforms to bring Brazil more into line with the United States and Europe. Most members of the banking industry are pleased with this result as the reforms proposed by Serra would have created a difficult time for bankers, trying to juggle the many changes, and could have resulted in a reduction in the large spread that Brazilian banks enjoy.

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