Cajas: financial institutions may limit the issuance of loans until the bill is passed by Congress

Legislative initiative to cut interest rates for debtors who repay loans on time could hurt those seeking funding, warns Federation of Municipal Savings Banks (Fepcmac).

The project, which has already been approved by the Economic Commission, proposes to financial institutions to upgrade the risk rating of debtors with loans up to 2 UIT, equivalent to SGD 9,200, and who are not in arrears every six months. during the last six months, which will lead to a decrease in the current loan rate.

For the union, this initiative, which is still under consideration in the plenary session of Congress, will financial institutions limit consumer loans for mypes to S/9900.

“Financial institutions will choose to lend above S$9,900 and fund borrowers who request a loan above this amount because it would not be profitable otherwise,” Fepcmac President Jorge Solis told Management newspaper.

Solis noted that under the conditions mentioned in the initiative, this would qualify as loans high risk for those below S/9900.

The representative of Sberbank argued that at present the SBS rule establishes that not only the timeliness of the debtor’s payments over the past six months, but also its cash flow or income, solvency, assets and solvency are taken into account to assess the rating.

“If a loan is granted, for example, for 24 months, it is important what the business flow (which requests a loan) will be during this period, and not just solvency or behavior debtor six months later,” he explained.

The representative of microfinance organizations added that the measure will affect those who apply for consumer loans, as well as micro and small businesses (mypes).

He also pointed out that this proposal, by discouraging microcredit Financial system formal, will force people and mype to resort to loans in the black, informal and parallel market.