A new credit firm is in the works, according to Thursday's announcement by Brazil's five biggest banks, EFE reports. The banks which are private-sector have announced that the credit registry will be used as a database for credit information, the publication adds.

According to FOX News Latino, the initiative is currently still under signing of absolute agreements and directing approval but when it is fully accomplished, the five banks including Santander's Brazilian unit, Banco Bradesco, Itau Unibanco, Banco do Brasil and Caixa Economica Federal will be leading the country to a revolutionary new credit company.

Known as the GIC, the new credit bureau will be reportedly using a database to "aggregate, reconcile and process" individuals' and legal entities' credit information, the news agency reports. Furthermore, the five banks, which will be in 20 percent stake each, will have the exclusive ability to exchange information.

This is in light of the current economic status of Brazil including inflation rates and unemployment as reported by the Wall Street Journal. The new credit bureau will also be analyzing potential bad loans, according to the publication.

Not only that, the GIC will offer better credit for eligible borrowers when it becomes fully operational within the next year according to executives, as reported by the news agency. "It will improve credit conditions, lower default rates and avoid over-indebtedness," Murilo Portugal, the president of Brazil's Federation of Banks, Febraban said as quoted by the news outlet.

According to the publication, the main focus of the initiative is to eliminate by distinguishing the risky credit line of individuals and legal entities to further create a better and positive financial stability. The default rates for consumers in Brazil are said to have risen to 5.8 percent in November and 4.5 percent for companies in a 90-day period, Miguel José Ribeiro de Oliveira, a research director at a Brazilian association of executives in the financial sector, Anefac said.

The numbers were then compared to the interest rates, which increased between 30.2 percent and 64.8 percent in a year, the news outlet reports. Meanwhile, Finextra reveals that in light of the project, the technical services will be provided by LexisNexis Risk Solutions.

A memorandum has already been signed according to the publication and it is seen to be revolutionary since the company will be providing for a high-speed and high-technology system where strong sets of data will be processed that will further reveal the credit information needed for the bureau's efficient program.