Positive Credit Law Will Enable Brazil Property Owners to Pay Lower Interest Rates
President Dilma Rousseff has sanctioned a Law – Cadastro Positivo (‘Positive Credit’) – which gives banks and other financial institutions the authority to offer low interest rate payments to consumers who prove themselves to be good at meeting their commitments.
According to Luis Fernando de Melo Mendes of the of the Brazilian Construction Industry Chamber of Commerce (CBIC) in the PINI Web magazine, it will be the housing credit sector that looks set to benefit principally from the new legislation: ‘in a financial agreement, the bank takes on a responsibility over many years and the risk of missed payments is high which, in turn, increases its loan spread. But now, the bank will be able to recognise the history of its clients and can reduce rates to attract them.’ Mendes also believes that competition will also increase and those who have good ratings will receive more credit offers.
President of Brazil’s main credit agency Serasa, Ricardo Loureiro, expects that the law will incentivise borrowers who have little proof of income to grow their ratings whilst also bringing down the level of delinquencies by over a half (which today is estimated at 6 percent of total lending levels).
