Brazil’s agribusiness booming; 18% increase in loan requests – study

RIO DE JANEIRO, BRAZIL – The advance of vaccination led to an improvement in prospects for small and medium-sized companies throughout the country. But even before that, some sectors countered the crisis and continued to grow.

Research conducted by BizCapital, a financial solutions fintech for micro and small companies, showed that the agricultural sector posted the highest growth in corporate loan requests during the pandemic.

From April 2020 to May 2021, the segment had an 18% increase in corporate loan applications when compared to the period from April/2019 to March/2020.

“All segments of the Brazilian agribusiness production chain posted an increase in 2020. And to leverage the good moment and continue expanding, companies in the sector have resorted to corporate credit lines,” says Cristiano Rocha, BizCapital’s credit director and co-founder.

According to the Brazilian Confederation of Agriculture and Livestock, agribusiness generated over 100,000 formal jobs between January and October 2020.

Although there were also losses for rural producers, agribusiness helped Brazil grow in the pandemic and this was one of the reasons behind the growth in loan requests from the sector, according to the executive.

Southeast region leads demand

Also according to the study, the Southeast was the region that most resorted to corporate loans, registering a 29% increase from April/2020 to March/2021, when compared to the period from April/2019 to March/2020.

On the other hand, the South posted a 25% drop in the monthly average of corporate credit search when compared to the same periods.

São Paulo, Minas Gerais and Bahia were the states showing the largest increase in demand for credit during the analyzed period, reaching 33%, 32% and 31%, respectively.

“SMEs expected to start the year with good growth, but unfortunately, for many entrepreneurs, the reality was another. But the good news is that we can gradually see signs of recovery for small businesses. It’s no coincidence that, according to SEBRAE, 70% of all jobs created in the first quarter 2021 were in small businesses,” Rocha says.

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