After two months of inactivity, 1×30 loans – with 1% interest and a term of 30 years -, aimed at the agriculture and livestock sector, resumed this Monday, August 28, said Mauricio Salem, president of the board of BanEcuador, the institution that delivers these loans from January 3, 2022 and it does not guarantee that this program and others like the one now represented by the entity: “Aquí cerquita” will be held in the next government, which brings the bank into action.
The 1×30 loan is placed in coordination with the Ministry of Agriculture and Livestock (MAG) -agricultural and livestock loans-, the Ministry of Industry and Production -loans for trade, services, small industry, crafts, artisanal fishing, fish farming-, the Ministry of Social Inclusion – with loans for trade, animal husbandry, agriculture, small industry, services and crafts.
“The loan of 1% for a period of 30 years was on pause because the funds for subsidization were exhausted, it is a subsidized loan at 15 interest that is subsidized by the ministry of (each) branch. Grant funds were exhausted, not the bank or loans,” explained Salem. He added that what is missing is the renewal of the social investment project by MAG, a process that ended last week with the approval of the budget certification for interest subsidies.
Agriculture requests an increase in the upper limit of the budget by 1×30 credits. Finance excludes the provision of additional funds and suggests that MAG redistribute its funds
On June 28, the Minister of Agriculture, Eduardo Izaguirre, announced in a letter addressed to the Director General of BanEcuador, William Chiang, that this process referred to by Salem is subject to an increase in the budget ceiling of the Project for the Promotion of Agricultural Investments (FIA), through which the loan funds are delivered 1×30. Two days before, Izaguirre had asked the Ministry of Economy to increase that budget cap, but the branch’s minister, Pablo Arosemena, rejected the increase and proposed that MAG reallocate funds from its $144 million budget to reactivate the 1×30.
The promise to deliver $1,000 million in four years will be 35% met
Salem revealed that to date, BanEcuador has delivered $278 million through 1×30 credit, 65% of which has targeted women. It is expected to deliver another $40 million by the end of 2023 to a total of $315 million, which would represent compliance with more than 35% of the government’s offer to provide $1,000 million over four years, as the current regime will not be able to complete its term in 2025 after of the death cross decree that forced early elections.
The BanEcuador 1×30 loan is increasingly popular among women and young people and would close this year at $180 million
“We can say that we are doing what has never been done before, we cannot say that what we are doing will continue to be done, we have a privileged service, care for the family, that is the direction that the president gave us. Republic… We hope that the next government will continue with the good things that are being done,” said the leader of Ecuador’s ban.
The merger between CFN and BanEcuador must be realized in the next government
Another process that will not be carried out in this government, but the next one has the obligation to do it until December 31, 2024, is the merger between BanEcuador and the National Financial Corporation (CFN) to create a new Bank for Economic Development. Salem explained that this process, which currently has progress between 35% and 40%, will have to be completed by the regime that will be elected this October 15 at the polls because the provision contained in the Organic Law for Economic Development and Fiscal Sustainability after the COVID-19 pandemic, November 2021
“It is a process that goes beyond government changes, because the Executive Order (406) is based on a law that exists in the Assembly that indicates that there must be a merger of public banks and that says that they must merge CFN with BanEcuador in an order to create a new Banco de Fomento Económico Productive, much bigger, more powerful banks, with much bigger heritage; However, these are processes that have to be followed, in which many parts that often do not come together have to come together and have to be adjusted a little bit over time,” explained Salem.
New services are started before management is completed
Other recent BanEcuador products that have no guarantee that the next government will give them continuity are the debit card launched in conjunction with Mastercard at the beginning of August and the new program of payment or collection chains “Aquí cerquita”, which was presented this Tuesday, August 29, in the north of Guayaquil.
Salem assured that the program initially includes the opening of 65 more points in thirteen provinces. This is a service similar to that for non-bank correspondents offered by private banking, where BanEcuador account holders can make deposits and withdrawals of up to USD 200.
BanEcuador is launching its Mastercard debit card as part of its financial inclusion strategy
“We bring the bank to the neighborhood, we make the bank closer to families, we make people’s lives easier by avoiding moving from one place to another, in rural areas covering miles and the bank on the corner. Initially, we are opening 66 stores today throughout the country in Azuay, El Oro, Amazonia, Pichincha, Guayas, Manabí and Sierra Centro”, assured the president of BanEcuador.
The services that will be offered by this new program are: deposits, withdrawals, inquiries about savings and current account balance, payment of BanEcuador loans and payment of bonuses for human development to bank clients. This will be through the technology platform of the transaction network, which will be duly authorized by the Banking Supervision and the Central Bank of Ecuador, through an agreement between the parties.
Salem predicts that 60,000 points will be opened in the medium term, and 150,000 in the long term, although the current government only has a little more than three months left.
Questions and answers Elections 2023
Source: Eluniverso
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
