Agro records an increase of 9,7% in the movement of FIDCs in the first quarter of 2023

Agribusiness recorded, in the first quarter of 2023, a movement of 15,1 billion in Credit Rights Investment Funds (FIDCs), a type of Investment Fund used for credit operations backed by receivables. The survey was compiled based on public data from the Securities and Exchange Commission (CVM) by Martinelli Advogados, which provides legal structuring and legal advice to these funds, which recorded a 9,7% growth in the number of FDCs in agriculture compared to the previous year.

This growth is mainly due to fears of a scarcity of resources for the sector, explains Walter H. Fritzke, Head of Financial Services at Martinelli. Furthermore, he adds, in the past, entering the financial system was difficult and time-consuming. Now, a company, entity or cooperative can create its own financial structure as a way of offering another service to its customer. He notes that agriculture already has an established consumption chain and sector institutions know the needs of their customers very well.

The investment fund industry in Brazil, especially FIDCs (Credit Rights Investment Funds), saw marked growth in 2022, with 361 new funds registered. Thus, the number of FIDCs at the CVM reached 1.908 at the end of December, an increase of 23,4% in the year. Agribusiness, according to the survey, represents 3,9% of the credit rights portfolio. The financial system is the leader in this segment with (32,5%), followed by Commerce (20,2%), Credit (16,5%), Industry (12,8%) and others (14,1%).

He adds that the modality helps to bring more liquidity to the segment due to the dynamics of the system. “FIDC’s focus is to finance the entire production chain to make the ‘wheels turn’”, highlights the specialist. Fritzke adds that agribusiness has three main players for adopting a FIDC, namely: agro-industries, agro-distributors and producers.

Growth trend

Still based on Martinelli's survey, regulatory changes, added to the economic context, meant that the year 2022 ended with over 1.900 FIDCs registered with the CVM, which represents an increase of 23% compared to the previous year for all economic segments . In total, FIDCs generated R$377 billion last year.

“Throughout 2022 we saw the Selic (base interest rate) increase by more than 4 p.p., which automatically transformed fixed income assets into targets for the capital market. And FIDCs – one of the investment vehicles in this sector – saw asset growth exceed 20% throughout the year”, analyzes Fritzke.

With a focus on streamlining new forms of commercialization, at the end of December last year the CVM published new rules for the investment fund market: CVM Resolution 175. This modernization, highlights Fritzke, had been expected since mid-2020 and it should bring more security to market agents, in addition to increasing the number of players in this sector. 

“We hope, with these changes, that the FIDC market will attract even more liquidity. For 2023, we are optimistic that the sector will remain strong”, concludes the Head of Financial Services at Martinelli.