Partnership between Inova and USP Aims to Create Credit Risk Models for Receivables Market
The Research and Innovation Center of the University of São Paulo, Inova USP, has an agreement with the Central de Receivables (CERC), a registration entity specialized in the receivables market. The project consists of developing research to characterize this market in Brazil and is coordinated by professor Leandro Maciel, from the Faculty of Economics, Administration and Accounting (FEA) at USP.
CERC and receivables market
The main product that CERC works with, a receivable is a financial asset that constitutes a company’s cash yet to be received, as Maciel explains. Generated after any installment sale, some companies try to anticipate them to advance the amounts expected for future dates and promote their operations.
“That’s where CERC comes in, whose main objective is to make the offer of credit viable for companies, that is, to encourage the anticipation of these receivables. It plays an important role in providing more security in any transaction involving financial receivables”, explains the specialist.
The professor also comments that CERC is one of the largest registrars of Central Bank receivables. In January this year, the entity reached the milestone of one trillion receivables originating from cards, which, according to Maciel, highlights the importance of the project: “It boils down to developing scientific research to better understand and characterize this market. Our future objective is to understand these operations and the characterization of this market, so we can better measure risks and better price assets.”
How the project works
In the process of hiring scholarship holders, the multidisciplinary project is still in its infancy, but with some lines of research defined, as the professor explains: “The development of credit risk models for the receivables market, research towards characterization, or that is, generating educational material about this market that does not yet exist and attracting these scholarship holders”.
Maciel also states that the partnership made on the project with CERC is unprecedented, from the point of view of studying the area of finance. “Receivables registers are a recent market infrastructure in the country. Although installment sales have been carried out in Brazil for a long time, this idea of registering operations to provide them with more security is something new and should be encouraged” , explains the project coordinator, who also comments that it is of great importance for the country, since, unlike other countries, installment sales in installments in the national territory is a very relevant practice.
“The main idea is to avoid fraudulent operations in this market. The objective of these registrars is to record this operation, so as not to allow you to go to another financial institution and advance a receivable that is already compromised. Its main role is to bring greater transparency to these operations and, at the same time, bring competitiveness, from the point of view of making these advances at lower rates and being able to promote business more efficiently”, he concludes.