Study shows modality accounted for 38.7% of loans to companies in 2023, a 0.5 percentage-point decline
02/10/2025
A survey conducted by credit bureau Serasa involving over 60,000 companies reveals that trade credit—non-bank credit—has lost ground in the total stock in 2023. However, the number likely increased in 2024, and more importantly, it’s expected to grow again this year, following the rise in the Selic policy interest rate and a consequent more restrictive stance by financial institutions in their lending practices.
The data indicates that trade credit accounted for 38.7% of the total credit extended to businesses in 2023, representing an annual decrease of 0.5 percentage points. According to Serasa’s survey, this type of credit totaled R$1.4 trillion that year, while the balance of bank credit, as reported by the Central Bank, amounted to R$2.27 trillion. In 2017 and 2018, this share exceeded 40%.
The survey considers non-onerous credit present in the financial statements of companies in the primary, industrial, commercial, and service sectors. Trade credit encompasses funds secured by companies from non-bank institutions, such as suppliers, through factoring of receivables.
“The data may seem outdated as it’s from 2023, but it’s not. That’s because we look at a vast universe of companies that take time to disclose their annual financial information,” explained Serasa Experian economist Camila Abdelmalack.
According to Ms. Abdelmalack, the annual decrease in trade credit participation is due to the evolution of the basic interest rate. Whenever the so-called Selic rate falls, reducing banking costs, the demand for alternative forms of credit also declines. The opposite also applies.
In 2023, the Selic rate dropped by 20 basis points, from 13.75% per year to 11.75%. Last year, however, the movement was mixed, with decreases in the early months and increases in the second half. For 2025, with an expected rate increase—currently at 13.25% per year—a slowdown in bank credit and an increase in trade credit is anticipated.
“The existence of these credit alternatives is important, as over 90% of Brazil’s companies are micro and small businesses, the most affected by a restrictive interest rate environment,” Ms. Abdelmalack said. “Trade credit is generally offered within the production chain and is crucial to ensure that the supply of specific inputs is not interrupted.”
There are different forms of trade credit. Fabrini Fontes, executive director of new businesses at Serasa Experian, states that, in wholesale, for instance, companies can use their future receivables as collateral for transactions. The industrial segment can also benefit by conducting transactions such as factoring of receivables. According to the survey, in 2023, commerce remained the sector with the highest share of trade credit in the total balance, at 54.1%. In the industrial sector, the percentage was 41.1%; in services, 22%; and in the primary sector, 26%.
The implementation, in Brazil, of a new trade bill book-entry system—known as “duplicata escritural”—over the coming years has the potential to change the credit dynamics for companies in the country and provide increased security in offering credit, particularly to micro, small, and medium-sized enterprises. According to Serasa’s director, the new instrument could stimulate trade credit. For Fernando Fontes, CEO of Cerc, the project is likely to increase the banks’ and other financial institutions’ appetite for these transactions and thereby reduce the need for alternative forms of credit.
“With the new trade bills, I believe the share of trade credit in the production chain tends to decrease over the total balance,” Mr. Fontes noted. “In a higher interest rate cycle, I think this is the most ready remedy to be used,” he added.
In December, Brazil’s monetary authority approved the new trade bills, and now, registrars interested in operating in this market, such as Cerc, must develop the toolkits detailing the operation’s process. Following that step, there will be authorization and testing phases until the new mechanism is effectively applicable to companies of different sizes.
Mr. Fontes says the increase in bank credit and through the capital markets would have a positive effect on the financial statements of non-financial companies, which would no longer need to bear the burden of these operations. According to him, that would also have an indirect effect on the end, allowing these companies to extend payment terms to their final customers.
*By Mariana Ribeiro – São Paulo
Source: Valor International