Bankruptcy protection filings up 38 percent in Q1 2023
In the first quarter of this year, 289 Brazilian companies filed for bankruptcy protection, up 37.6 percent from the same period in 2022, according to data from Serasa Experian, Brazil’s largest credit bureau. It’s the highest level in five years.
Why it matters. Micro and small businesses account for more than 20 percent of bankruptcy protection filings, a trend that is expected to grow in the coming months. In addition, default rates are at a record high, with 6.5 million businesses unable to pay their debts and secure new lines of credit — nearly 90 percent of which are SMBs.
Backbone. Businesses are considered micro and small when they post revenue up to BRL 4.8 million (USD 977,560) a year. They are the heart of the Brazilian economy and account for eight out of every ten formal jobs created in the country, mostly in the services sector.
Yes, but … The number of large companies, such as giant retailer Americanas and telecom operator Oi, resorting to court-supervised recovery has also increased, accounting for 35 of the requests filed between January and March, up from 18 in last year’s first quarter.
- According to Serasa economist Luiz Rabi, “when the number of requests for judicial reorganization...
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