Rural credit worsens while agricultural capital market advances, says BC

The BC (Central Bank of Brazil) pointed out a deterioration in risk indicators in rural and agro-industrial credit operations for individuals in the REF (Financial Stability Report), released this Monday (25). At the same time, the monetary authority shows progress in private agribusiness financing instruments, which continue to grow at an accelerated pace in the country.

The document points to an increase in the perception of risk in types of credit to families and highlights a worsening precisely in rural and agro-industrial operations for individuals, whose indicators increased throughout 2024 and 2025. The report also indicates that the upward trend in the probability of default in these portfolios should continue in the coming periods.

"Quotes mentioning risks of default and activity increased in an environment with a high level of leverage for families and companies. Concern stands out regarding the increase in the commitment of income to payment of private sector debts and default in agribusiness, which could put pressure on the supply of credit and contribute to a further slowdown in economic growth", says the report.

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In terms of companies, the BC recognizes that payment capacity remains under pressure amid the high interest rate environment. According to the report, "the caution identified in the PTC (Quarterly Credit Conditions Survey) remains consistent with the challenging payment capacity of companies and families."

The document also points to pressure on the profitability of public financial institutions, "mainly due to the impacts of the materialization of risk, especially in the rural credit portfolio", indicating that the deterioration in agriculture already affects operations linked to the business segment.

In addition, the BC states that "there are still signs of risk propensity, but FIs continued to reduce their appetite", in a scenario of greater caution on the part of financial institutions when granting credit.

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"The payment capacity of companies remains challenging, under the influence of tightening financial conditions. Despite a still contractionary monetary policy, economic activity has shown resilience, which has positively influenced the increase in revenues and EBITDA of larger companies", says the BC.

Capital market on the rise

At the same time, the capital market linked to agribusiness continues to advance. The CRA (Agribusiness Receivables Certificate) grew 16.5% in 12 months until December 2025, while the CPR (Rural Product Certificate) increased 18.3% in the period. Other instruments also registered expansion, such as FIDC (Credit Rights Investment Funds), with an increase of 22.9%, and debentures, which grew by 18.4%.

The movement reinforces a trend highlighted by the BC itself: "although slowing down, the capital market continues to grow at a much higher rate than bank credit". According to the report, this market has been absorbing "part of the credit demand from large companies through the issuance of debentures and commercial notes, and part of rural credit through CPR issues."

In terms of funding, the BC records a 2% semi-annual drop in the stock of LCA (Agribusiness Letters of Credit), a movement that it attributes to the "scenario of lower appetite among issuers due to the crisis in rural credit that took place in 2025".

International scenario worries

The external scenario also appears as an additional factor of concern. The BC states that "the outbreak of the conflict between the USA, Israel and Iran has considerably increased uncertainty about the global scenario", affecting "the flow of commodities through the Strait of Hormuz".

According to the report, the conflict caused "increased energy prices" and "reassessment, by the markets, of the prospects for inflation". The BC also assesses that "the prolongation of the conflict in the Middle East increases geopolitical uncertainty and could affect global trade and commodity flows, with macro-financial repercussions."

Source: CNN