## The Growing Impact of Sicoob in Brazil’s Financial Landscape
### Introduction
Sicoob, a cooperative financial institution, is making waves in the Brazilian financial landscape. With approximately 7.3 million affiliates, including 430,000 rural producers, Sicoob is a significant player in the country’s agricultural sector. In a bid to support the agriculture industry, Sicoob has planned to release an impressive R$ 52 billion in rural credit in the harvest of 2023/24, which commenced on July 1. This is a 33% increase from the previous cycle and represents a substantial growth compared to previous years.
### Gaining Traction in the Market
Over the past few years, institutions like Sicoob and Sicredi have been gaining significant ground in the agricultural credit segment. However, their progress was truly accelerated in the previous season when the government granted cooperatives the authority to grant credit with the equalization of rates from the National Treasury. Despite several interruptions in the release of funds in the 2022/23 harvest, mainly due to budgetary restrictions and high demand, Sicoob managed to work with R$ 24 billion in matched resources. Looking forward, the institution expects to have R$ 29 billion in matched resources in the current harvest of 2023/24.
### Allocation of Funds
Sicoob’s plans for the 2023/24 harvest include the allocation of R$ 37 billion for costing operations, R$ 8 billion for investment lines, and R$ 7 billion for industrialization and marketing. Additionally, around R$ 8 billion will be offered to family farmers through the Pronaf (National Program for Strengthening Family Agriculture), while medium-sized producers will have access to R$ 10 billion through the Pronamp (National Program for Support of Medium Agriculture).
### Exploring New Frontiers
Sicoob is not content with its current position in the market and hopes to expand its operations further. This expansion is reflected in its efforts to increase its network of physical service points. In the previous crop season, Sicoob opened 400 new locations, especially in the South and Midwest regions. This year, Sicoob seeks to continue this momentum and aims to increase its presence in the North and Northeast regions of the country.
### Embracing Digital Transformation
While Sicoob is expanding its physical presence, it also recognizes the importance of keeping up with digital advancements. The institution continues to invest in the digitization of its operations, such as accepting proposals for financing through its application. By combining a strong physical network with digital innovations, Sicoob aims to provide its affiliates with convenient, accessible, and efficient financial services.
### Anticipating Changes in Demand
Sicoob is well aware that the demand for investment credit may shift in the coming year. In the previous harvest of 2022/23, investment credit saw a slowdown due to increasing production costs, higher interest rates, and political and economic uncertainties. However, with the expectation of a fall in the Selic rate and the government’s announcement of interest rate discounts for investments in sustainable stocks, Sicoob anticipates a renewed demand for investment credit. The resources of the Plan Cultivos, which offer lower interest rates for business agriculture, are expected to become more competitive, attracting more investments.
### Sicoob’s Growing Rural Credit Portfolio
With its increasing participation in the crop plan and other financing options, Sicoob’s rural credit portfolio has experienced remarkable growth. In the past year alone, the portfolio expanded by 50% to reach an impressive R$ 51 billion. This positions Sicoob as the third-largest portfolio holder in the segment, trailing behind Banco do Brasil and Sicredi. As Sicoob continues to expand its operations and gain market share, its influence and impact on Brazil’s financial landscape will only continue to grow.
### Conclusion
Sicoob’s plans to release R$ 52 billion in rural credit in the 2023/24 harvest demonstrate its commitment to supporting the agriculture industry in Brazil. With the cooperative financial institution gaining traction in the market and expanding its network, Sicoob is well-positioned to play a significant role in the country’s financial landscape. By embracing digital transformation and anticipating changes in demand, Sicoob aims to meet the evolving needs of its affiliates. As Sicoob’s rural credit portfolio continues to grow, its influence in Brazil’s financial sector will undoubtedly strengthen, solidifying its position as a key player in the industry.
### Summary
Sicoob, a cooperative financial institution in Brazil, has planned to release R$ 52 billion in rural credit for the 2023/24 harvest, marking a remarkable 33% increase from the previous cycle. With a network of approximately 7.3 million affiliates, Sicoob has been gaining ground in the agricultural credit sector. The institution’s expanded physical presence, combined with its investment in digital operations, positions it well to meet the evolving needs of its affiliates. As Sicoob’s rural credit portfolio continues to grow, it cements its status as a significant player in the Brazilian financial landscape.
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Sicoob, a cooperative financial institution with about 7.3 million affiliates throughout the country (430 thousand rural producers), plans to release R$ 52 billion in rural credit in this harvest 2023/24, which began on July 1. The amount is 33% higher than the R$ 39 billion of the 2022/23 cycle, which represented a 63% growth compared to 2021/22.
Institutions such as Sicoob and Sicredi have been gaining space in this segment for some years, and progress was accelerated last season with the green light from the government so that cooperatives could also grant credit with equalization of rates from the National Treasury -although in In the 2022/23 harvest, there were several interruptions in the release of these funds, especially those transferred by the BNDES, due to good demand and budgetary restrictions.
In 2022/23, when it represented about 9% of the total disbursements of resources included in the Safra Plan, Sicoob worked with R$24 billion in matched resources, and expects to have R$29 billion in 2023/24, according to Francisco Reposse Junior, commercial and channel director of the group.
In this 2023/24 harvest, Sicoob expects to release R$37 billion in costing operations, R$8 billion in investment lines and R$7 billion for industrialization and marketing. Around R$ 8 billion will be offered to family farmers, through Pronaf, and R$ 10 billion to medium-sized producers, through Pronamp.
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According to Reposse, demand for investment credit should pick up, which cooled in 2022/23 amid rising field production costs, higher interest rates, and political and economic uncertainties. On this front, the government announced an interest rate discount for investments in sustainable stocks.
With the expectation of a fall in the Selic rate in the coming months, still at 13.75% per year, the resources of the Plan Cultivos, which for business agriculture have interests between 7% and 12.5% per year, tend to earn more Competitiveness Regarding investment, Reposse expects a good demand for credit for the construction of warehouses, given the notorious deficit existing in properties, and believes that contracts for the acquisition of machinery will remain firm.
To expand its operations, Sicoob has expanded its network of physical service points. There were 400 openings in the 2022/23 crop, especially in the South and Midwest regions. The institution promises to keep pace in 2023/24, and one of the objectives is to increase its presence in the North and Northeast of the country.
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According to Reposse, participation in fairs is also strengthening in the current season. Sicoob will be present at more than 30 events of its kind in 2023/24, and smaller fairs with a regional scope are on the list. But the investments in the digitization of operations will also continue, such as the receipt of proposals for contracting resources for financing through the application.
With a growing participation in the crop plan and other financing with its own resources, in addition to alternatives such as the consortium of machines, Sicoob’s rural credit portfolio reaches R$ 51 billion, an increase of 50% in the last year. It is the third largest portfolio in the segment, behind Banco do Brasil and Sicredi.
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