consórcio

A consórcio is a form of collective buying or financing system common in Brazil. It involves a group of individuals or companies who come together to pool their resources to acquire goods or services. Typically, a consórcio is administered by a specialized company that manages the funds and facilitates the acquisition process.

Members of a consórcio make regular monthly payments into a shared fund. Each month, one or more members are selected to receive a credit, known as a "carta de crédito," which allows them to purchase the intended item. This selection is usually done through a lottery (sorteio) or by members offering the highest bid (lance). The value of the credit is typically the price of the good or service being acquired.

Consórcios are often used for purchasing vehicles, real estate, or even for services like weddings or renovations. It's a way to finance larger purchases without paying interest, although there are administrative fees charged by the managing company. The advantage is avoiding interest on loans, but the downside is that members might have to wait for an extended period to receive their credit, depending on when they are selected. The process is regulated by the Central Bank of Brazil, ensuring a degree of security for participants.