DISTRIBUTION CHANNELS FOR RURAL CREDIT

This policy brief by the Climate Policy Initiative (CPI) analyzes the distribution channels for rural credit in Brazil. It argues that the current design of financial services, characterized by a complex and geographically uneven network of banks and cooperatives, creates additional uncertainty for farmers. The brief highlights a mismatch between the supply of credit and the actual agricultural potential of different regions, suggesting that simplifying the structure of rural credit could improve policy effectiveness and resource allocation.

• The distribution of financial institutions in Brazil is not closely aligned with agricultural potential, meaning credit availability is often determined by the presence of banks and cooperatives rather than the needs of the producers.
• Financial institutions are heavily concentrated in the Southern and Southeastern regions of Brazil, with 33% of all branches located in state capitals, leaving Northern and Northeastern regions with limited financial access.
• Rural credit lending in Brazil is highly concentrated among a few major players; Banco do Brasil provided more than half of all rural credit in the 2015-2016 agricultural year, totaling R$ 85.2 billion.
• The funding sources for rural credit are diverse and vary significantly in their terms; for example, in 2015-2016, Compulsory Resources offered credit at 9.5% interest, while the Northern Constitutional Fund offered rates as low as 6.5% for small producers.
• Different financial institutions rely on different primary funding sources, which leads to uneven credit options for farmers depending on their location. Banco do Brasil relies heavily on Rural Savings, while Bradesco, Itaú, and Santander primarily use Compulsory Resources.
• The availability of funding from various sources fluctuates dramatically year-to-year, creating a lack of predictability for producers regarding credit availability.

APA

Souza, P., Assunção, J., & Figueiredo, B. (2018). DISTRIBUTION CHANNELS FOR RURAL CREDIT. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/02/CPI_Brief_IN_-_Distribution_Channels_for_Rural_Credit.pdf

Chicago

Souza, Priscila, Juliano Assunção, and Beatriz Figueiredo. DISTRIBUTION CHANNELS FOR RURAL CREDIT. Climate Policy Initiative, 2018. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/02/CPI_Brief_IN_-_Distribution_Channels_for_Rural_Credit.pdf.

Wikipedia

{{cite report |last1=Souza |first1=Priscila |last2=Assunção |first2=Juliano |last3=Figueiredo |first3=Beatriz |title=DISTRIBUTION CHANNELS FOR RURAL CREDIT |publisher=Climate Policy Initiative |date=February 2018 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2018/02/CPI_Brief_IN_-_Distribution_Channels_for_Rural_Credit.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{souza2018distribution, author = {Souza, Priscila and Assunção, Juliano and Figueiredo, Beatriz}, title = {{DISTRIBUTION CHANNELS FOR RURAL CREDIT}}, institution = {Climate Policy Initiative}, year = {2018}, month = feb, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2018/02/CPI_Brief_IN_-_Distribution_Channels_for_Rural_Credit.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }