The challenges that the Banco de la Nación must assume to grant loans to micro-enterprises

The government of President Pedro Castillo began the path towards strengthening the Banco de la Nación. Thus, this morning the Legislative Decree was published that dictates measures for the capitalization of the institution, as part of a strategy to provide credits to small businesses in the not too distant future.

In this regard, the Finance professor at the UPC Business School, Jorge Luis Ojedawelcomed the initiative and remarked that competition will always be healthy in any economy, even at the level of financing and interest rates.

“The issue of competition, in any industry, is always important, because it improves market conditions so that prices go down, in this case interest rates,” said the specialist.

However, he stressed that the Executive must design a pertinent regulatory framework for the election of micro-enterprises that will be subject to credits in an institution not accustomed to granting them, and therefore, “without sufficient experience.”

“The microenterprise, as a company, has limited liability. It is like lending money to a person: you can go after the estate; but, in the case of limited liability companies, they are pursued to the extent of the assets to pay the credit, ”he submitted.

“The question is who is going to analyze the level of payment risk of these companies. The Banco de la Nación does not have the expertise”, she added.

However, Ojeda rescued that in developed countries there is also the figure of the state bank that grants financing, for which he should ask to point towards the technical strengthening of the Banco de la Nación so that negative experiences of other financial institutions in previous governments are not replicated. .

“It is interesting that microentrepreneurs are lent money, especially in working capital so that they can operate, but let’s also see from the other side. the MEF must clarify why this time it will work,” said Ojeda.

“The objective of financial inclusion is positive, but it can end up being irresponsible if this professional quality is not built at the time of granting credits,” he added.

Credits and informality

On the other hand, the professor recalled that “the formal is pushed against the ropes” and a single measure, such as that of the Banco de la Nación, does not resolve the situation. This, because the informality in which it will be forced to compete, after obtaining the credits, reaches 80% of the Peruvian market.

In this way, Jorge Luis Ojeda He explained that a joint strategy should be launched to eradicate informality in the market, as well as piracy, in order to prevent that small businessman from going bankrupt and, consequently, not paying his debts to the State.

“We have seen the case of Reactiva Peru’s emergency loans, which worked very well at the beginning, but now there are many who are not going to be able to pay them. And this is not necessarily because the businessman does not want to honor his debts, but because the unfair conditions of the market and informal competition do not allow him to generate profitability, ”said the specialist.