Economy

Brazilians turn to loans in order to supplement income during the pandemic

A survey shows that most people resorted to credit to offset a partial reduction in monthly income or as an emergency solution in the case of those who lost their entire source of income

a man holds some notes of reais, the brazilian currency
Photo: Shutterstock

The COVID-19 pandemic led 43.4% of Brazilians to use the loan to supplement their income, according to research by Lendico, a Brazilian fintech specialized in personal online loans. The research sought to understand the changes in consumer profile and behavior caused by the pandemic. According to the survey, 70% of respondents had never taken out a loan before.

Among those who associated the loan with the pandemic, the survey shows that most people resorted to credit to offset a partial reduction in monthly income (45%) or as an emergency solution in the case of those who lost their entire source of income (16%).

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Considering the total number of survey participants, when asked about the reason for having made a loan, 36.4% did so to pay debts.

The survey was conducted in January 2021 with 800 people. Of the total respondents, 53% are formally employed by companies and 40% are self-employed.

Brazilians seek more digital banks and credit fintechs

According to the Brazilian Digital Credit Association and the Brazilian Fintechs Association, loans have tripled between digital banks and credit fintechs. According to the associations, last year the segment provided BRL 10 billion in loans.

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In general, the volume of loans granted in Brazil in 2020 increased 15.4% – the highest growth registered since 2012, showed a survey by the Brazilian Federation of Banks (Febraban). The growth was driven mainly by loans to companies seeking support to face the COVID-19 crisis.

The corporate loan portfolio grew 21.7% in 2020, while credit to individuals increased 10.8%.

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