BanEcuador’s 1×30 credit is gaining ground among women and young people and would close this year at up to $180 million

BanEcuador expects to close this year 2022 with a 1×30 credit placement (1% rate at 30-year term) of between $150 million and $180 million, which would represent a total delivery of $750 million in credits by the bank. And for the following year the goal is to double this number.

This was commented by Mauricio Salem, president of the Board of BanEcuador. The official explained that so far this year BanEcuador has reached the $124.8 million placed in this type of credit, considered the star product of the bank. These resources have benefited some 46,782 people, while the percentage of delinquency reaches 0.68%.

Salem assures that this is an adequate way to democratize credit, since the resources reach more people and he remembers that in other governments a credit of $100 million reached a single person. Additionally, in other types of credit products, a total of $679 million has been delivered to date.

The 1×30 loan is gaining ground in various sectors and according to the figures it benefits a higher percentage of women and young people, depending on the customer profile managed by the bank. Thus, 52.6% of the credits were received by women and 47.40% by men. Regarding the age of the beneficiaries, 28.23% are clients between 19 and 29 years old and 22.51% between 30 and 39 years old.

The 1X30 credit is placed in coordination with the Ministry of Agriculture (agricultural and livestock credits), the Ministry of Industries and Production (credits to commerce, services, small industry, artisanal, artisanal fishing, fish farming), the Ministry of Social Inclusion (with credits for commerce, livestock, agriculture, small industry, services and crafts). The conditions will always be the same: credits of $500 up to $5,000 with a 30-year term at a rate of 1%. This is in line with the campaign promise to deliver $1,000 million under these conditions throughout the entire government period.

According to Salem, this goal is achievable, because this first year has been the start and once it is achieved, growth will be faster.

Thus, from January 3 and ending on November 21, credits originating from the MAG reach $104.6 million in some 40,682 operations. This means 83.79% of the volume of credit delivered.

Meanwhile, the Ministry of Industry and Production has delivered $19.4 million in 5,777 operations, which represents 15.56% of the money delivered.

The credits coordinated with the MIES are still in their infancy, which is why $0.8 million has been placed in 323 operations, which is equivalent to 0.65%.

The 1×30 credits have benefited a number of operations in various areas of the country. Thus, for example, the Guayaquil zone has been benefited with 13,791 operations, followed by Loja with 6,769 and Portoviejo with 6,365. Additionally, the Quito area has delivered loans in 5,606 operations, Ibarra with 5,581, Riobamba 5,297 and Cuenca with 3,373 operations.

In accordance with Alberto Acosta Burneo, editor of Weekly Analysis, It is correct that public banks take on a subsidiary role and help access to credit for people who are not served by banks or cooperatives. In this sense, he indicated that it is important that BanEcuador focus on rural credit and on actors who have greater difficulty in accessing it. Alluding to the example that Salem gives about how a loan of $100 million was previously given to a single person, he explains that this model, on the other hand, was not correct, since public banks that have limited resources cannot waste them on those who can. access credits in private or even international banks.

In this sense, the current model would be directed to the correct destination, but warns that it must be balanced with sustainability. Remember that many governments tend to have easy credit programs that later become difficult and end up in equity problems for public financial institutions.

“The great challenge is that you have to give access, but at the same time you have to guarantee sustainability. Canceling debts means having less resources for future credit, ”he says.

Meanwhile, according to Santiago García Álvarez, president of the Pichincha College of Economists, this credit program must be understood as a social inclusion program for the most vulnerable sectors, entrepreneurs, women, peasants. This is a good initiative. However, for García there is still a lack of credit for the small and medium productive sector. Well, it is what is needed for economic reactivation. “The criticism that we make from the College of Economists: there is no contribution from the public bank that really affects and that becomes the engine of the economy. Public banks deliver a lower percentage of credits (5% and 6%) of the total credit mass”. (YO)