Study shows that companies’ access to credit remains restricted in June

The indicator has fallen more than 41% in just five months, surpassing the decline during Brazil’s crisis from 2014 to 2016. (Between November 2014 and September 2015, the indicator fell 37%)
Economics
24 June 2020
Study shows that companies’ access to credit remains restricted in June

FGV IBRE’s Ease of Access to Credit Indicator, calculated in line with business surveys, indicates that companies’ access to credit remains restricted so far in June, despite recent efforts by the government to facilitate it. The indicator now stands at 55.6 points, close to its level in May (56.2 points). This is the result of a reduction in the proportion of companies saying they have “ready” access to credit, from 10.8% to 7.7%, more than offsetting a decline in the share of companies saying they have “difficult” access, from 36.8% to 33.8%.

The indicator’s preliminary result for this month is the lowest since June 2016, when it was 55.3 points. It has dropped 39.7 points since January of this year, when it was 95.3 points. It fell 31.8 points between March and April alone – the biggest ever monthly decline. The indicator has fallen more than 41% in just five months, surpassing the decline during Brazil’s crisis from 2014 to 2016. (Between November 2014 and September 2015, the indicator fell 37%).

Breaking down this month’s preliminary results by sector, only services is down, from 60.5 points to an all-time low of 54.5 points. If this result is confirmed, the sector will have lost 36.6 points or 40% since its highest value this year (90.8 points in January). On the other hand, the commerce sector has reversed some of its decline in May, rising from an all-time low of 45.5 points to 50.3 points. Although this result is positive, it is still the lowest level out of all sectors and it is down 30.2 points or 38% from the highest figure this year (80.5 points in February).

Construction has risen 3.0 points, to 72.4 points, just 11.2 points below its highest value this year (83.6 points in March). Finally, industry is virtually unchanged since May. This sector saw the biggest absolute decline in relation to its highest figure this year (110.2 points in January) ‒44.4 points or 40%.

See an article by researcher Renata de Mello Franco on this subject.