Financial entities warn that the interest rate cap puts 1.3 million mypes access to credit at risk | ECONOMY

Congress has put on the agenda the bill that seeks to impose interest rate caps, in an expanded agenda to end its term, until December 29.

“We express our total rejection and concern about the proposed measure, which does not take into account the difficult health, economic and social situation of Peru, in the framework of the COVID-19 pandemic, ″ indicated the companies of the financial sector, municipal savings banks, microfinance institutions and banks.

In the statement, to which they participate the Peruvian Federation of Municipal Savings and Credit Banks (FEPCMAC), the Association of Microfinance Institutions of Peru (Asomif) and the Association of Banks of Peru (Asbanc), maintain that their inclusion in the plenary’s agenda has been through of public threats to the Board of Directors of Congress.

This in allusion to what was stated by the new president of the Consumer Defense Commission of Congress. Johan Flores, from the Podemos bench, who indicated that he will evaluate requesting censorship from the Board of Directors chaired by Mirtha Vásquez if the bill is not scheduled to put caps on interest rates in the financial system.

With this, a new financial crisis is created, in which it is sought to regulate the prices of the financial system, which in this case is the interest rate.

To this is added the roadblocks in the agro-industrial sector.

Pending default

They warn that, The opinion has not complied with the regular procedure of Congress, since it omitted its review by the Economic Commission and has not taken into account the technical opinions of the Ministry of Economy and Finance, the Central Reserve Bank, the Superintendency of Banking, Insurance and AFP, and of the unions of the sector.

“The stability of the financial sector is essential for our economic reactivation, since credit needs to flow to families and companies,” say the financial sector entities.

Credit risk

With this decision, Congress puts at risk access to credit in the microfinance segment, which has more than 1.3 million mypes clients, 3 million clients with consumer loans and 28 thousand direct jobs.

“If approved, it would exclude millions of people from the financial system. Families and their productive ventures would be at the mercy of informal lenders, with interest rates that dramatically exceed those of any formal financial institution (792% per year according to information from the BCRP as of July 2020), ”they indicate in their statement.

Explain that interest rates respond to the risk profile of each client.

“When comparing the rates charged in Peru with those of other countries, it must be taken into account that we have a much higher level of informality than any similar country,” they argue.

Likewise, the experience of neighbors such as Colombia and Chile putting rate caps shows that they have only managed to limit access to credit and encourage the emergence of informal and violent lender mafias, such as the so-called “drop by drop”.

“Since the free setting of interest rates was allowed in the early 90s, the number of people who access formal credit in our country has multiplied by five and the development of microfinance has become a worldwide example,” they mention .

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