Slow Bank Loans Push Brazil’s Builders Toward Receivables Funds

Brazil · Markets

When the bank is too slow and the building site cannot wait, Brazilian developers are increasingly turning to a corner of the capital markets that converts tomorrow’s payments into today’s cash.

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A mismatch between the urgency of the construction site and the slow pace of bank lending is fueling a shift in how Brazilian companies fund themselves, with receivables funds emerging as a favored alternative. According to Anbima, the association that represents Brazil’s financial and capital markets, the private credit market moved R$192.8bn ($37.9bn) in the first quarter of 2026, up 22.5% from a year earlier, and the standout vehicle was the receivables fund, known locally as a FIDC.

Why builders are turning to receivables funds

For construction firms, the appeal is timing. Bank credit in Brazil has been both slow to approve and expensive, weighed down by high interest rates, while building projects need cash to keep moving.

A FIDC buys or structures receivables, such as contracts, installment sales and trade bills, and converts those future payment flows into immediate liquidity for the company that originated them. That makes it a natural fit for developers who are cash-constrained but hold a pipeline of expected payments.

The instrument is well established in Brazil and has long drawn interest from international investors and hedge funds, because the funds are often built in tranches, with the originating bank keeping the first-loss layer, which can give the fund a better credit rating than the underlying loans.

Record inflows as other funds bleed

The money flows tell the story. In April, the broader fund industry recorded net redemptions of R$18.1bn ($3.56bn), with fixed-income funds losing R$19.3bn ($3.79bn) and multi-strategy funds shedding R$5.4bn ($1.06bn).

Against that tide, FIDCs posted the market’s largest monthly inflow, a net R$4.5bn ($885m), bringing their positive balance for 2026 to R$12.1bn ($2.38bn). The divergence underscores how investors, faced with high rates, are gravitating toward credit instruments backed by identifiable cash flows rather than traditional pooled funds.

What it signals about Brazil’s credit market

The trend points to a gradual disintermediation of Brazilian finance, in which capital markets pick up funding that the traditional banking system is slow to provide. That can be healthy, widening the menu of financing for companies and giving investors yield in a high-rate environment, but it also concentrates exposure to the quality of the underlying receivables, a risk that grows if the economy softens.

For the construction sector specifically, the surge in FIDC funding is a workaround for a credit bottleneck rather than a cure for it, and its durability will depend on whether borrowing costs ease as the central bank weighs its next moves. For now, the receivables fund has become one of the more telling barometers of how Brazilian companies are adapting to expensive money.