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Financial institutions are naturally leveraged companies that use their debt to aim for profit in their operations. The role of financial intermediary gives these institutions the context needed to use financial leverage for profit. Among the several variables used in debt levels of these institutions, Hortlund (2005) highlights inflation as having a central role in this phenomenon. This study aimed to find out how inflation influences the debt of Brazilian financial institutions. To achieve this goal, data of brazilian banks from 1996 to 2013 were analyzed, being related to other variables in order to allocate more consistency of the model used. Through balanced and unbalanced panel data regressions, results indicate that different from the hypothesis defended by Hortlund (2005), inflation has a negative impact on debt earned by financial institutions during the period. Other findings of the study indicate that the representative variables of increased operations of these institutions, such as GDP growth, growth of assets and loans/assets positively impact the leverage of financial institutions, indicating that these are more likely to go into debt when they can apply this capital in productive operations. Finally, it was found out that the guidelines contained in the Capital Accords Basel II and Basel III, which were required by the national financial system, influenced negatively the levels of debt of financial institutions, making them less leveraged.

Over the past five years, the microcredit sector has experienced unprecedented growth. The number of borrowers served by microfinance institutions (MFIs) has increased threefold to reach 120 million clients, according to MIX estimates as of December 2009 and by other estimates the number may be as high 190 million (Microcredit Summit Campaign 2011). In large markets, such as Mexico and South Africa, commercial banks and consumer lending companies have expanded their activities to include microfinance for low-income households. Unfortunately, the growth of microcredit is not always sustainable. Some iconic markets, such as India and Bosnia Herzegovina, are experiencing large-scale credit crises, and they are not alone. The deterioration in the quality of MFI loan portfolios can be attributed to several factors. Some fast growing MFIs have outgrown their risk management systems and controls. These weaknesses have often been exacerbated by high staff turnover, leading to a further erosion of credit discipline. Rapid growth has also been focused in narrow geographies, which in turn affected borrower repayment incentives and behaviors. This report takes a fresh look at the state of credit reporting at the base of the pyramid. The data and analysis for this paper are drawn from International Finance Corporation (IFC) and Consultative Group to Assist the Poorest (CGAP) market intelligence on credit reporting systems. the lessons learned for effective credit reporting at the base of the pyramid and identifies key success factors as well as common challenges.