An application of the PEARLS system to Brazilian credit unions

Authors

  • Valéria Gama Fully Bressan Universidade Federal de Minas Gerais; Faculdade de Ciências Econômicas; Departamento de Ciências Contábeis; Centro de Pós-Graduação e Pesquisas em Contabilidade e Controladoria
  • Marcelo José Braga Universidade Federal de Viçosa; Departamento de Economia Rural
  • Aureliano Angel Bressan Universidade Federal de Minas Gerais; Centro de Pós-Graduação e Pesquisas em Administração
  • Moisés de Andrade Resende Filho Universidade de Brasília; Departamento de Economia

DOI:

https://doi.org/10.1590/S0080-21072011000300005

Keywords:

PEARLS system, failure, credit unions, Sicoob

Abstract

The main objective of this study was to adapt the indicators of the PEARLS system to Brazilian reality and to estimate the probability of insolvency of the credit unions affiliated with Sicoob (the Brazilian Credit Unions System). With this in mind, a Logit model was estimated using a database with 35,485 observations obtained from a sample of 510 cooperatives affiliated with Sicoob from January 2000 to June 2008. The results obtained showed the relevance of indicators in the following key areas (using the original nomenclature of the system), which appear to be the most important for the analysis of the insolvency of the studied cooperatives: Protection, Effective financial structure, Assets quality, and Rates of return and costs.

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Published

2011-09-01

Issue

Vol. 46 No. 3 (2011)

Section

Finance & Accounting

How to Cite

An application of the PEARLS system to Brazilian credit unions. (2011). Revista De Administração, 46(3), 258-274. https://doi.org/10.1590/S0080-21072011000300005