June 22, 2020 / 12:39 PM / 19 days ago

Brazilian credit bureau Boa Vista SCPC may revive IPO plans

SAO PAULO (Reuters) - Brazilian credit bureau Boa Vista SCPC is considering reviving plans to go public after a rapid expansion in credit score queries prompted it to shift its focus to organic growth rather than acquisitions.

“We wanted to buy smaller companies with anti-fraud products,” Chief Executive Officer Dirceu Gardel said in an interview with Reuters, adding that the revived initial public offering would be on a smaller scale. “Now, the focus will be on organic investment.”

Like two dozen other companies in Brazil, Boa Vista, whose investors include private equity fund TMG Capital and credit-scoring company Equifax (EFX.N), had filed for an IPO earlier this year, only to suspend it amid the market slump triggered by the novel coronavirus pandemic.

One of the triggers for the revival in its IPO plans has been a surge in demand for credit history data allowing borrowers with good records a chance to borrow at lower interest rates. This system gained traction in Brazil this year under a shift that saw all potential borrowers’ credit histories included unless they opted out.

Gardel said Boa Vista had seen a 15% spurt in demand for credit data from April to May.

Brazilian banks, which have boosted provisioning and become more restrictive in granting new loans as the current downturn deepens, are increasingly requiring higher fair credit scores from borrowers, Gardel said.

“I don’t think the volume of queries would have grown so much had it not been for the pandemic,” he added. Banks, retailers and other companies that offer credit to buyers pay a fee to companies like Boa Vista and its rivals including Experian (EXPN.L) and Quod - a joint venture of some of Brazil’s leading lenders - to access credit data and grant a score that measures the borrower’s risk.

Boa Vista has yet to decide on a precise timeframe for its IPO, Gardel said.

By Aluísio Alves; Editing by Christian Plumb and Paul Simao

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