Credit unions operate in more than half of municipalities

The segment operates in 55.3% of Brazilian municipalities, totaling 3,080 locations. Just last year, 174 new municipalities had a credit union service unit. At the end of last year, there were, across the country, 799 individual cooperatives, 32 central cooperatives, four confederations and two cooperative banks.

The active credit portfolio (total active loans) of the cooperative system increased by 22.4% in 2022. expansion of 35.9% in 2021a reflection of the economic recovery after the start of vaccinations against covid-19, the credit union’s stock of loans and financing slowed down in 2022, but continued to expand above the SFN average, whose credit portfolio grew 14% in the last year.

The total number of cooperative members increased by 14.5%, from 13.6 million in 2021 to 15.6 million in 2022. Of this total, 13.2 million are individuals and 2.4 million are legal entities. The greatest growth occurred in legal entities, whose presence increased by 17.8%. According to the BC, 90% of cooperative members are legal entities and micro and small companies.

The number of individuals rose 13.9% last year. According to the report, the largest number of associates in this category corresponds to men, with 55.8% of the total number of individuals. In the distribution by age group, most cooperative members are between 30 and 39 years old, representing 23% of men and 22.9% of women.

Regions

In terms of regions, the South continues to lead credit unions, with service units in 95.9% of the municipalities. Then come the Midwest (75.2%), Southeast (70.3%) and North (36.9%). The Northeast has the lowest penetration, with only 13.8% of municipalities served by credit unions.

Regarding growth, however, the North leads the way in attracting new members, with an increase of 34.7% in the number of individuals and 28.4% of companies last year.

Financial health

The total assets of credit unions, which include not only the credit portfolio, but other assets, totaled BRL 590 billion in December 2022, up 28.6% in the year. The stock of funding added up to R$ 466 billion and rose 29.9%, at a faster pace than that of other branches of the National Financial System.

Regarding the financial risks of credit unions, the BC reported that 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 level of provisions (financial reserves to cover possible losses) is above 90% of expected losses in the loan portfolio. The sector, noted the report, continues to operate above the safety limits required by regulation.

Legal framework

The BC report analyzed the new legal framework for Brazilian credit unions. According to the agency, the Complementary Law 196/2022, which updated Complementary Law 130/2009, brought improvements with great potential to further leverage the segment. Among the main innovations, highlighted the document, are adaptations related to the promotion of activities and businesses, management and governance, as well as the systemic organization and efficiency of the National System of Credit Unions.