The bank loan default rate in Brazil reached 4.4% in April 2026, the highest level since the start of the Banco Central‘s revised historical series in March 2011. The figure was released by the monetary authority on Thursday (the 28th). The record came on the eve of the launch of Desenrola 2.0, the new federal debt renegotiation program that began in May.
The rate matches the one recorded in February of this year, when the indicator had already raised red flags among economists and credit managers. Two peaks at the same level within two months reinforce the perception that the credit market is going through a cycle of heightened stress, with a growing share of borrowers unable to meet their financial obligations.
The Banco Central indicator covers loans more than 90 days past due, for both individuals and companies. This criterion is the most representative measure of so-called critical credit. Debts in this range have a low likelihood of recovery without some form of renegotiation.
The high default rate pressured the government to bring measures forward. Desenrola 2.0 was designed to offer a way out for debtors who, without a renegotiation program, would hardly be able to get out of the red on their own.
Individuals Drive the Rise in Defaults
Among Brazilian households, defaults rose from 5.3% in March to 5.4% in April, the highest level since May 2012, when the rate stood at 5.5%. Consumers remain the main source of pressure on the quality of banks’ loan portfolios.
The 0.1 percentage point increase consolidates a deteriorating trend seen in recent months. Products such as revolving credit card debt, non-payroll-deductible personal loans and vehicle financing account for the highest delinquency rates among consumers — a pattern that has repeated itself since the previous cycle of rising defaults.
Market analysts point out that the combination of high interest rates, a growing share of income committed to debt and persistent inflation in essential items has eroded the ability of a considerable portion of the population to pay, especially in lower-income brackets.
The level of household debt also remains high. In April, the ratio of total outstanding debt to income accumulated over twelve months stood at 49.8%, a slight drop from 49.9% in March. Even with the small improvement, the level indicates that nearly half of everything Brazilians earn in a year is already committed to debt.
Corporate Defaults Remain at Their Highest Level in Eight Years
In the corporate segment, defaults were stable at 2.8% in April, the same rate as in March. The figure is the highest level for companies since May 2018, when the indicator stood at 3%.
Experts view the stability with caution. The fact that the rate is holding at a historically high level indicates that the corporate credit environment has not yet found a turning point, especially for small and medium-sized businesses. These companies have less access to cheaper credit lines and longer terms, which limits their ability to renegotiate liabilities during times of financial strain.
Retail, construction and services are among the sectors hit hardest in cycles of high defaults. The pressure on these activities also tends to be reflected in the labor market and in household income generation.
What Brought Brazil to This Level
The surge in defaults is rooted in a credit cycle that expanded rapidly in previous years. Government programs and the digitalization of the financial system made it easier for historically unbanked segments of the population to access credit. With the interest rate hikes carried out by the Banco Central to contain inflation, the cost of credit soared.
A high Selic rate makes credit more expensive and reduces the room for maneuver of those already carrying a large volume of financial obligations. This mechanism creates a cycle that feeds defaults. In addition, persistent inflation in categories such as food and electricity erodes households’ purchasing power and reduces the share of income available to pay off debts.
Desenrola 2.0 as a Response to the Credit Crisis
The federal government launched Desenrola 2.0 in May, acknowledging that the credit situation requires direct intervention. The program offers easier terms for debtors to renegotiate overdue debts, with discounts, extended installment plans and the possibility of being removed from credit bureaus’ negative lists.
Authorities expect the program to reduce default rates over the coming months, ease household debt and bring consumers back into the credit market on more sustainable terms. The outcome will depend on the number of participants and on banks’ ability to absorb the renegotiations without a severe impact on their balance sheets.
The next Banco Central data, for May, will be the first real gauge of Desenrola 2.0’s impact on the default trend. If the program mobilizes a large number of debtors, the indicator could begin to decline starting in the second half of 2026.
