I was wondering if the rise of neo banks is tapping out the credit ability of customers. This is not dependent on rates but on customer indebtness ratios. After a novelty phase, people would be maxed out until its all repaid. Thoughts?
Brazilians believe that the general indebtedness of the population is high because debt-service/income ratios are ~35%. I don't have data by population segment.
I don't think the population demand for debt has tapped out, given the growth rates these banks continue to guide forward. Also, as explained in the article, with low unemployment and higher salaries, lending to the lower classes actually probably scores better than ever before for a lot of people. I don't see credit growth slowing from these banks because of regulatory limits; I believe it will come from higher delinquencies.
Really good read man!
Any views on China rerouting more goods to Brazil + potentially increasing FDI?
lower inflation faster >>> allow CB to ease more and prevent recession driven by corporates (seems like rates dont impact HH as much)
maybe FDI helps offset some commodity risk w oil
Could be. Havent seen specific data. Exports and imports both heavily China driven
I was wondering if the rise of neo banks is tapping out the credit ability of customers. This is not dependent on rates but on customer indebtness ratios. After a novelty phase, people would be maxed out until its all repaid. Thoughts?
Brazilians believe that the general indebtedness of the population is high because debt-service/income ratios are ~35%. I don't have data by population segment.
I don't think the population demand for debt has tapped out, given the growth rates these banks continue to guide forward. Also, as explained in the article, with low unemployment and higher salaries, lending to the lower classes actually probably scores better than ever before for a lot of people. I don't see credit growth slowing from these banks because of regulatory limits; I believe it will come from higher delinquencies.