Credit unions grow and operate in 55.3% of Brazilian municipalities

By the end of 2022, there were, across the country, 799 single cooperatives, 32 central cooperatives, four confederations and two cooperative banks. The number of cooperative members increased by 14.5%, from 13.6 million in 2021 to 15.6 million in 2022. The greatest growth was represented by the Corporate base, where 90% are made up of micro and small companies.

According to the President of the Union and Organization of Cooperatives of Bahia (OCEB – Bahia), Cergio Tecchio, the growth of credit cooperatives shows that the segment is able to further expand its participation in the scenario of the national financial system.

“More and more credit cooperatives, which are capable financial institutions that have planning, have more participation in society, in the community, be it throughout the country. This entails a whole prospecting job, to ensure that small municipalities, small communities have full financial assistance through credit unions. So cooperativism today is prepared and increasingly seeks this integration of offering a very strong range of products and services at prices compatible with the needs of the market”, he says.

The total assets of credit unions, which include the credit portfolio and other assets, totaled BRL 590 billion in December 2022, up 28.6% in the year. Fund raising totaled R$ 466 billion and rose 29.9%, at a faster pace than that of other branches of the National Financial System.

Despite the slowdown in growth, the SNCC’s active loan portfolio reached R$383 billion in December 2022 and remained the SFN segment with the highest credit expansion (22.4% in the year). Most of these assets are represented by credit operations granted to micro and small companies, among associated Legal Entities, and to rural producers, among Individuals.

The president of the Union and Organization of Cooperatives of Bahia, the modernization of legislation was essential for expanding the number of credits granted to micro and small companies.

“At the time when the legislation allowed us to work with legal entities, a whole strategic work was done to promote training, systems development, strategic planning in the sense of seeking out micro and small companies so that they could join the cooperative and, above all, products and services suitable for these types of society were developed”, he says.

According to the BC, troubled assets (such as defaulted loans) grew in 2022 after two straight years of decline, reaching 4.6% of total assets. According to the agency, the levels of financial reserves to cover possible losses are above 90% of expected losses in the credit portfolio.

Regions

According to BC there was growth in cooperativism in 2022 in all regions of the country. With emphasis on the South region with service units in 95.9% of the municipalities. Then, Midwest (75.2%), Southeast (70.3%) and North (36.9%). The Northeast region is the least covered by credit unions, with coverage in only 13.8% of the municipalities.

According to the report, the North region was the one that grew the most in 2022, with an expansion of 34.7% in the number of individuals and 28.4% of legal entities.

Legal framework

The rules of the National Cooperative Credit System were updated and modernized with the sanction of the Complementary Law 196/2002 benefiting existing credit unions in Brazil and representing an important milestone for the segment.

All updates to the law provided greater security, protagonism and leveraged cooperatives in the Brazilian economy.