(Adds upstanding loans and context)
BRASILIA, Dec 22 (Reuters) - Brazil’s loan default ratio fell in November from the previous month while outstanding loans rose, the central bank said on Monday.
Loans in arrears for 90 days or more, the benchmark gauge for delinquencies in the nation’s banking system, rose to 4.9 percent of outstanding loans, compared with a revised 5 percent in October, according to central bank data. It was the lowest default ratio in five months.
The drop in defaults suggests consumers and companies, chiefly small- and mid-sized firms, are reining in debt as private-sector lenders toughened credit terms and slowed disbursements over the past year.
Outstanding loans in Brazil rose 1.3 percent in the month, up from 0.8 percent in October.
Credit growth in Brazil has been led by state-run banks, which have increased lending despite private lenders remaining more cautious after a spike in defaults.
The government of President Dilma Rousseff has started to reduce subsidies to state-led banks as part of an effort to shore up the country’s finances after years of heavy public spending. (Reporting by Luciana Otoni; Writing by Alonso Soto; Editing by W Simon and Bernadette Baum)