Out of every R$ 100 lent by banks in Brazil, nearly R$ 5 were more than 90 days overdue in July. The average default rate rose from 4.6% in June to 4.9% in July, the highest level since March 2011, when the Central Bank's revised data series begins, according to figures released on Friday (28) and reported by G1. In practice, more families and businesses are falling behind on their payments, and credit could get even more expensive for everyone.

For individuals, the squeeze is tighter: defaults rose from 5.4% to 5.8%, also a record for the series. Among companies, the rate climbed from 3.2% to 3.3%, the highest since October 2017, when it reached 3.4%.

Understand the indicator

Brazil's Central Bank counts as in default any credit operation more than 90 days past due, covering loans, financing and credit cards held by households and companies. When this rate rises, banks tend to lend less and charge higher interest to offset the risk. That is why the indicator affects even borrowers who pay on time.

The record came even with the Novo Desenrola Brasil program, known as Desenrola 2.0, running since May. The program is the federal government's latest debt renegotiation scheme, and according to the Finance Ministry it had already renegotiated more than R$ 22 billion across about 3.6 million agreements by the end of June. Finance Minister Dario Durigan said this week that enrollment in the program was extended until August 31.

Household indebtedness remains high as well. The outstanding balance of family debt equaled 49.8% of income accumulated over 12 months in June, stable from the previous month, according to the Central Bank. For a family earning R$ 3,000 a month, that is roughly R$ 18,000 in debt.

Data from credit bureau Serasa Experian cited by G1 show that 82.8 million Brazilians were in debt in March, equivalent to 49% of the population, with balances totaling R$ 557.7 billion. Of that total, 47% was concentrated in financial institutions, precisely the target of Desenrola 2.0.