While the great banks closed more than a thousand branches in the last year – and plan to reduce even more – credit unions have expanded their physical presence in the pandemic and have set foot in new parts of the country.
Largest institution in the segment, the Sicoob opened 197 branches in 2020, a 6% growth in its base, which reached 3.48 thousand jobs. With that, in number of branches, it now only loses to the Bank of Brazil, which closed December with 4,400 units. THE Sicredi, the country’s second largest financial cooperative, with 2 thousand branches, has increased its network by another 150 points in the pandemic and has another 250 units planned for this year, with investments of R $ 200 million.
The movement is supported by the central bank, which set the goal of increasing the participation of cooperatives in the credit of the National Financial System to 20% by 2022 – today the share is 10% double the amount seen five years ago. The calculation used by the BC takes into account niches in which cooperatives do not operate, such as credit to large companies. If the entire system is accounted for, the participation of cooperatives would be around 5%.
Many originated in the agricultural sector, the cooperatives went beyond the field and today serve customers from all sectors, both individuals and companies, after lower interest rates. As they are not for profit – since they lend basically to their own associates, who are, therefore, the owners of the business – they get more competitive rates.
There are currently more than 5,000 cooperatives in Brazil, 827 of which are credit, with total assets of R $ 310 billion and a loan portfolio of more than R $ 156 billion, according to the latest survey carried out by the Organization of Brazilian Cooperatives System (OCB). In credit specifically, there are more than 10 million members and 6,043 service stations.
Last year, in the wake of the covid-19, the cooperatives led the ranking of lending to small businesses, being responsible for 31% of the total, according to the National Cooperative Credit System (SNCC).
“They played a fundamental role during the crisis, which was to make the money reach the small producer, businessman, trader and entrepreneur”, says the coordinator of the FGV economics course, Joelson Sampaio. “It is important to remember that, often, small children have a lot of difficulty dealing with banks, due to the demands that are made.”
To further expand the segment’s participation in the National Financial System, the BC wants more flexibility in the rules for association, a movement that has already seen in the last decade. The idea is to allow, for example, that a member of one institution can take part of the credit in another, if yours does not have enough resources. This makes room for larger companies to be cooperated.
In the BC’s assessment, cooperatives are important because, in addition to irrigating small companies and expanding banking competition, they are an alternative to financial inclusion.
The service to regions of the country where transactions involving paper money and checks are still significant, including the outskirts of large urban centers, explains in part the opening of cooperative branches. “The little ones have difficulty accessing financial services, but also to means of payment. This was at the time of Pix (instant and electronic payment method, led by the Central Bank) ”, says Sicoob’s president, Marco Aurélio Almada.
To give you an idea, in a period of less than three months, from November to mid-January, more than 8 million checks were deposited in Sicoob. “For checks and cash transactions, physical size is still required,” he comments. For this year, Sicoob plans to reach 2,144 Brazilian municipalities, an increase of 14%.
The executive points out that these transactions have low returns to financial institutions, but that cooperatives are able to provide the service because they are not for profit. “Cooperativism serves to help with this pain, providing services in geographies that are not interesting for large banks,” he says. As a result, interest is usually more attractive. At Sicoob, for example, the rate of personal credit is 15.75% per year compared to an average of 31.6%.
BC study points out that the number of municipalities where the credit union is the only alternative for obtaining financial services went from 184, in December 2018, to 202, a year later. According to the regulator, the increase reflects both the expansion of face-to-face service and the reduction in the number of branches and bank service points. “While the trend of banks is the search for increased efficiency, thus reducing fixed costs with branches, credit unions go against the grain, increasing their presence in the interior of the country”, reinforces the senior analyst at risk rating agency Fitch , Pedro Carvalho.
Sicredi’s executive president, João Tavares, highlights that the physical presence of credit unions is a competitive differential. “Our performance is based on being where people need us and, as financial inclusion is still an evolving issue in the country, our pace of penetration into new communities remains strong. Our expansion plans in terms of branches in 2020 were even higher than what was accomplished ”, emphasizes the executive.
Away from the banks
Owner of a consulting and training company, Mauri Pimentel manages his entire financial life through the Sicoob application. It has not operated with any commercial bank for ten years. “The rates are much more competitive”, he comments. The businessman recalls that long before the Central Bank imposed a limit on interest rates on overdraft, credit unions already offered affordable rates.
In the middle of the pandemic, when Pimentel saw his revenues drop 80%, he turned to Sicoob and had access to Pronampe (National Program to Support Micro and Small Enterprises), launched by the government). With R $ 50 thousand in hand, and with interest of 35% per year, Mauri irrigated his business at the worst moment and was able to breathe.
In his case, going to an agency is a rarity. “Only in an emergency,” he says. All your needs, both as an individual and as a legal entity, are solved by the application or internet banking.
Clóvis Amaral, owner of a motorcycle parts, accessories and services store in Goiânia, has been cooperating with one of Sicoob’s cooperatives for 17 years. Early in the pandemic, when he kept his business closed for 30 days, he received a visit from the cooperative manager to offer an emergency line for working capital, which was readily accepted.
Thus, Clóvis took out a loan of R $ 80 thousand, with interest of 0 7% per month.
When the government launched Pronampe, the small business owner received yet another call and visit from his manager. He received a proposal for a loan of R $ 200 thousand. Clóvis took the credit and took the opportunity to pay the most expensive debt. “If it weren’t for the cooperative, I would have had a lot of problems, as I saw other people having”, points out the entrepreneur.
It was Sicoob’s portfolio for micro and small companies, a sector that lacks credit in large banks, precisely the one that expanded most last year: 60%. This was the great lever for Sicoob’s total credit portfolio to grow by around 30%, to a balance of R $ 89 billion.
According to Almada, from Sicoob, physical presence is crucial. It is with it that the cooperative knows companies better, to understand their risk, since many of these companies do not have organized balance sheets. “The cooperative looks for social return,” he says.