The payment of debts has been in the background among members who opt for an unsecured loan at the Ecuadorian Social Security Institute (IESS). That was the main destination of these credits until 2019, but since the pandemic that has changed and now the first thing is health expenses.
For every $100 lent, almost $40 was used to cover medical expenses in 2020. In 2021 it was almost $42 for every $100. And the trend continues, since in January 2022 it is more than $43 for every $100 provided, according to data provided by the IESS Bank (Biess).
Before COVID-19 spread in Ecuador, in 2019, 38.9% of unsecured loans went to paying debt and 37% to health expenses, and that percentage has been rising over the course of the pandemic.
Now the payment of debt occupies the second position of destination. Since 2020 it has dropped to 36% and 37%.
| Destination of unsecured | 2019 | 2020 | 2021 | January 2022 |
|---|---|---|---|---|
| health expenses | 37% | 39.8% | 41.66% | 43.34% |
| Debt payment | 38.9% | 36.4% | 37.91% | 37.22% |
| Investment in education | 11.7% | 9.2% | 10.80% | 9.76% |
| Purchase of household goods | 6.5% | 6.5% | 8.06% | 8.17% |
| travel expenses | 2.6% | 1.1% | 1.54% | 1.51% |
| Vehicle Purchase | 2.6% | 0.7% | – | – |
In 2021, Biess delivered $2,925.2 million in unsecured accounts, of which $1,218.6 million went to health and $1,108.9 million to debt payments.
In January 2022, $258.8 million were delivered: $112.2 million for health (89,800 credits) and $96.3 million for debt (74,337).
Social Security loans for education have gone up and down, but have yet to recover from pre-pandemic times. Last January they represented 9.76% with 17,329 credits and $25 million. Those made for the acquisition of household goods have been increasing and are at 8.17% with 10,332 operations and $21 million.
Those allocated to travel expenses were also reduced. They now represent 1.51%, which includes 2,342 credits for $3.9 million.
The unsecured to buy vehicles are no longer included in the breakdown of 2021 or so far in 2022.
While in the first month of this year, four affiliates requested an unsecured to cover the payment of alimony. Those credits were small because between the four they add up to $1,555.
IESS recovered 4% of affiliates in 2021, but has not yet overcome the loss of the pandemic
Biess plans to deliver 30% more this year in all its types of credit and for unsecured holders it has the highest growth goal: $3,916.1 million, that is, 33.8% more than the placement achieved in 2021.
In mortgages, it plans to deliver $752.4 million, a growth of 26% compared to the $596.7 million granted in 2021 in 10,077 credit operations.
The goal in pledge loans also presents an increase of 4.6%, considering a placement of $104 million for this year, a figure that exceeds the $99.4 million granted in 2021.
In total, the board of directors of the Bank of the Ecuadorian Institute of Social Security approved in January the annual goal of $4,772.6 million for credit placement. During 2021, disbursements totaled $3,621.4 million in mortgage, unsecured and pledge loans.
Iván Tobar, general manager of Biess, has pointed out that Biess’s expectation when raising these figures is to benefit affiliates and retirees and contribute through these loans to the growth expectations of the economy. (I)
Source: Eluniverso
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