Medium banks raise concern about cut in payroll – 03/15/2023 – Panel SA
The ABBC (Brazilian Association of Banks), which represents small and medium-sized banks, expressed concern this Wednesday (15) with the effects of the cut in payroll interest on companies in the sector.
According to the entity, a part of the market already operates offering credit with rates below the ceiling and with low profitability in the operation. In this way, the reduction in rates from 2.14% per month to 1.70%, approved by the National Social Security Council this Monday (13), should make it impossible to grant money to the public, especially those who concentrate greater risk. of default, that is, those with lower incomes and the elderly, according to ABBC.
“The reduction brings risks to the continuity of its actions in this operation with the implementation of the new ceilings, which could result in market concentration in a few banks, harming competition in the provision of services to retirees, especially to the unbanked public” , says the ABCC.
The entity foresees a new drop in loans, deepening the movement registered in recent years. In 2020, R$ 104 billion were transferred to the INSS public, falling to R$ 56 billion last year – a level below that registered in 2019, when R$ 78 billion were granted.
ABBC claims that the new ceiling could generate an “important deterioration” in the job market in a scenario with more than 77,000 companies that operate in the payroll loan offer and 240,000 certified professionals for the commercialization of credit.
“We believe that there will also be an impact on the performance of the correspondents, responsible for approximately 50% of the origin of the borrowed amounts, providing assistance even in rural and difficult-to-access regions, areas not fully assisted by the banking network”, says the entity.
This week, Febraban released a note in which it states that “the fixed interest levels do not support the cost structure of the product and the new ceilings have a high risk of reducing the supply of payroll loans, leading a public, lacking in affordable credit options , to products that have more expensive rates in their structure (products without guarantees), as a considerable part is already negative”.
Joana Cunha with Paulo Ricardo Martins It is Diego Felix
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