The main credit analysis firm in Brazil has made clear indications that, in addition to rising levels of consumer and business lending, housing finance also looks set to escalate well into 2011.
Serasa, who act as the main point of reference for the major companies and lending institutions of the country, demonstrated solid indications of growth in their bi-annual forecast published at the start of November.
The organisation stated that the main reasons for the boost in mortgage lending will be rising consumer confidence complemented by favourable conditions in the employment market and the ongoing willingness of individuals to increase their debt levels remaining high.
Concerns nevertheless remain with regards to the growth of various segments of the credit market in Brazil. Whilst the Serasa report stated its expectations for defaults to decrease, a recent announcement by consumer organisation IBEDEC stated that the number of people seeking advice on dealing with mortgage arrears is mounting.
Central Bank President Henrique Meirelles, prior to the election of Dilma Rousseff as new president, pointed out that strong dollar inflows could create credit risks in Brazil, stating, “We need to be very careful and strengthen the prudential rules of our banks to protect the economy from credit bubbles.”