Brazil’s Credit Revolution: Capital Markets Surge to 28.8% of Corporate Lending

In a notable shift, Brazil’s capital markets have nearly tripled their share of corporate lending since 2016, reaching 28.8% in 2024.

This surge represents a fundamental change in how Brazilian businesses access credit, with far-reaching implications for the country’s financial landscape. An exclusive JGP survey reveals that investment funds have significantly increased their role in corporate credit.

The capital market’s credit stock has grown by an astounding 488% since 2016, pushing the total volume to R$ 3.39 trillion ($565 billion). This growth has outpaced traditional bank lending, which grew by only 56.17% in the same period.

Debentures have been at the forefront of this expansion, with the market growing sixfold. In 2024, fixed-income funds saw record inflows of R$ 242.98 billion ($40.5 billion), reflecting investors’ growing appetite for corporate debt.

This shift has democratized access to debt instruments. Smaller companies, particularly in real estate, are now turning to Capital Real Estate Receivables (CRIs) as bank credit tightens.

Brazil’s Credit Revolution: Capital Markets Surge to 28.8% of Corporate Lending. (Photo Internet reproduction)

The CRI market volume skyrocketed from R$ 40 billion ($6.7 billion) to R$ 220 billion ($36.7 billion) in 2024. Credit Rights Investment Funds (FIDCs) have emerged as a crucial tool for small and medium-sized businesses.

They raised R$ 113.47 billion ($18.9 billion) in 2024. These funds offer more flexible financing options, with SRM Asset alone lending R$ 3.5 billion ($0.6 billion) via FIDCs.

As capital markets expand their role in corporate lending, a new dynamic is emerging in Brazil‘s financial sector. This transformation is reshaping relationships between companies, investors, and funding sources, promising significant changes in the years to come.