Evidence shows a causal relationship between the development of the credit market and economic growth. In addition, factors related to business environment - such as legal security, creditors rights, and brokerage costs - are central for a dynamic credit market.
In the last decades the Brazilian credit market had periods of relevant institutional advances as well as times where direct interventions caused setbacks and fiscal costs, without positive economic or social impact. Currently the Brazilian credit market suffers from limited access to information, high credit recovery costs, high legal insecurity, and high regulatory costs for financial intermediation, leading to low volumes and high costs.
We propose an agenda of microeconomic reforms that focuses on enhancing legal security and decreasing information asymmetry to tackle structural problems and ensure a sustainable growth of the Brazilian credit market.