Reactiva Perú is a program of 60 billion soles in credits granted by Financial Entities (banks, savings banks, etc.) to companies of all sectors, under special terms defined by Law and Regulations. Mainly as working capital to maintain the payment chain and respond to workers and suppliers during the COVID 19 pandemic. The low interests (between 1 and 1.7%) were achieved by the guarantee provided by the State (between 80 and 98% of the credit).
Some press, commentators and, worse if they are businessmen; They have interpreted that money is a gift from the state and that “state guarantee” is synonymous with a business “dead dog”, resulting in the debt being paid out of the money of all Peruvians. Analogy to the universal bonus or the retirement of the ONP but in favor of those who “have more.”
As an entrepreneur, when I decided to apply for the loan, I had to sign a contract. This indicates that, unlike other loans, Reactiva will be supervised at any time and is not freely available. It specifically tells me where I can use it. I must pay it within the next 4 years. With low interest, it is true, but with uncertain economic expectation as to whether my business will be able to recover that money.
If the conditions are violated, the Bank can terminate the loan period and advance its collection. Using all the resources you have to execute the debt, because if you did not do it, the guarantor State will not cover the guarantee. And if I am unable to pay the installments in due time, the collection process will be just as demanding.
It is true, if the Bank is unable to collect the debt, it will be the State who will replace the guaranteed amount, but not in hard cash; but with securities that can only be used in operations with the BCR, such as new loans, auctions and interbank operations. In other words, the private ticket that the banks placed will not be returned as cash but will be managed within the system.
As a beneficiary I must be very cautious in the use of money. I am receiving the equivalent of three months of my sales, when I had the business closed for four or more months. In addition to salaries and settlements and payments to suppliers; I can make improvements that allow me to keep running. And I force myself not to withdraw profits during the term of the loan. (I plan to return it as soon as possible).
Will I have consequences if I don’t pay? Yes. I will first suffer the execution of the Bank. And if the State covers my debt, it will return to charge me with the same rigidity or more than the Bank. There is no escape.
Thinking as a consumer that the entrepreneur applying for the loan has already calculated in advance that he is not going to pay it, is a mistake. Having a business, developing and operating it, is not sacrificed for just the three-month sales average. Will there be companies that do not pay? Yes; those that despite Reactiva, cannot survive. And they will have to go through the painful process of liquidation, which always means loss of equity of the owners or investors.
The Reactiva result is visible daily. Just by watching the queues of chicken shoppers or mall goers. It has allowed more than 70% of the companies affected by the Covid crisis to survive. Let’s just hope that it has been enough and that the sanitary conditions are not worse in the following months. As of July 2021, payments will have to be honored. Hopefully the positive circumstances for it. For the good of all.
Sources: Law, Regulations and Agreement of the Credit Reactiva Peru.
