Demand for Credit in Brazil Falls 18% in the First Semester of 2024

Neurotech, a company specialized in data analysis, released a worrying report on the credit situation in Brazil. According to the Neurotech Credit Demand Index (INDC), the search for financing in the country registered a significant drop of 18% in the first half of 2024, compared to the same period of the previous year.

Natalia Heimann, leader of Neurotech's Business Unit for Data & Analytics for Credit, points out that this downward trend is not recent.“Credit demand has been operating on negative ground since August 2022, with rare exceptions”, she explains.

Sectoral analysis reveals that the financial segment had the lowest decline in June (-22%), followed by retail (-21%). Surprisingly, the service sector showed a positive growth of 30%. In the accumulated half, retail was the most affected, with a fall of 30%, while banks and financial retreated 14%. The service sector remained resilient, with an increase of 18%.

In retail, the supermarket category was the only one to record growth (4%) in the first half, indicating a prioritization of basic spending by consumers. Department stores were the most impacted, with an impressive drop of 61%.

Natalia Heimann does not see prospects for improvement in the short term. “For the coming months, we do not see a significant reversal of this scenario, even because of the maintenance of Selic at a high level”, she says.

This scenario of retraction in the demand for credit reflects the economic challenges faced by Brazilians, with compromised income and focus on essential expenditures.The situation demands attention from economic sectors and may indicate the need for measures to stimulate access to credit and boost the economy.