Microcredits at 1% per year and a 30-year term are declared a national priority by decree

President Guillermo Lasso declared as a national priority the delivery of social interest loans to the microcredit segment of 1% per year for a 30-year term, through public banks. This was one of his campaign offers.

With Executive Decree 284, issued on December 10, 2021, it establishes a partial subsidy and three ministries to coordinate actions that allow identifying the possible beneficiaries of this financial product that will be delivered by BanEcuador.

The partial grant will be given in accordance with the amounts supported in the technical reports, and that are not covered at the rate of 1%, to cover costs and operating and financial expenses, including the costs of credit risk, funding and operating, that they demand these microcredits.

The grant request must be submitted by BanEcuador to the Ministry of Economy and Finance, which will approve or deny it. The budget allocation will be subject to the guidelines established by that State portfolio. One of the provisions of the decree indicates that Finance, “within the scope of its powers, will manage and make viable the allocation of economic resources based on the mechanisms that current regulations provide.”

In addition, the board of directors of BanEcuador is available to request the Financial Policy and Regulation Board to establish a maximum interest rate for social interest credits belonging to the microcredit segment of 1% for a 30-year term, according to the management policies issued by the bank.

The Ministries of Production, Foreign Trade, Investments and Fisheries, of Economic and Social Inclusion, of Agriculture and Livestock, in the cases that have investment projects, in which beneficiaries are identified that may be subject to microcredits of 1% to 30 years BanEcudor, with the subsidies, will process them directly with this public bank and the corresponding ministry.

Authorities have previously indicated that these credits would begin to be delivered as of January 2022. The president has indicated that the credits at 1% interest and a term of up to 30 years will be destined to small entrepreneurs in the agricultural and livestock sector and with emphasis on the woman. (I)