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Corporate credit demand rises in Brazil, loan expansion expected to continue

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Corporate credit demand rises in Brazil, loan expansion expected to continue

Demand for credit from Brazilian companies increased 5.7% year over year in April as improving economic conditions spurred greater confidence among firms, especially smaller enterprises, to take on new debt, according to credit research firm Serasa Experian.

In the first four months of 2018, corporate demand for credit increased by a similar 5.7%, Serasa said.

"The resumption of economic growth, albeit at a slower pace than initially expected at the start of the year, coupled with falling interest rates, has stimulated the search for credit," the credit research firm said.

Demand for credit from micro and small businesses was particularly robust, rising 5.9% in April from a year earlier.

Meanwhile, Murilo Portugal, the president of Brazilian banking association Febraban, said he expects the current cycle of credit expansion in the country to continue, Reuters reported.

"Banks have been increasing credit [disbursements], especially within consumer credit, which has been growing since last year, and in the case of some segments, such as vehicles, there is very strong growth," Portugal was quoted as saying.

Brazil's central bank held its benchmark Selic rate steady at 6.50% at its most recent policy meeting. That decision followed two cuts of 25 basis points each in February and March.