Few requirements and fast disbursement. Those were two of the reasons why Andrés C.decided to apply for a credit in a cooperative to buy a motorcycle.
They lent him $ 5,000 with a guarantee of $ 200 and in a week.
The facility to give credits is one of the reasons for its vertiginous growth in the last year. Up to October, the credit portfolio of the cooperatives of segment 1 and 2, which cover the largest entities in the country, grew by 30%,while deposits increased by 17%, according to statistics from the Association of Private Banks of Ecuador ( Asobanca).
One of the factors, according to the banking sector, is the limitation that the government imposed on auto loans last year, which requires more guarantees to access a car loan.
“Gentlemen,we have to be calm about this issue”, is the message conveyed by Marín Bautista, general manager of Finan coop, a second-tier financial institution,that is, it lends money to 119 cooperatives in the country.
Although Bautista believes that the situation is temporary, the entities of the popular and solidary sector will seek to limit the delivery of credit, through the increase of interest rates or with more requirements, so as not to affect the strength of the cooperatives.
“We have to be more selective in the credits because such a strong demand may later become an increase in arrears,” says the manager of Finan coop.
For now, the delinquency in the entities of the sector remains at low levels, but the concern of Bautista is that due to the economic adjustment, unemployment will grow in 2019 and that affects the payment possibilities of its clients.
Another factor to restrict credit is the liquidity problem that crosses the country,which also forces banks to take the same measure.
Juan Pablo Guerra, manager of the Union of Cooperatives of Savings and Credit of the South, assures that the increase of the credit is “responsible and controlled” and it is explained by the growth that the sector has had.
However,Guerra believes that financial education should be propped up among clients, so that they give more value to savings and can borrow with higher criteria.
From Asobanca, we look closely at the performance of cooperatives because of their impact on the economy and even for possible contagion to banks in the event ofa crisis.
Other figures of the sector
Cooperatives have also ventured into issuing credit cards. According to Finan coop, 180,000cards of this type have already been issued and 80% correspond to customers of the cooperative JEP. Other entities will also be added.
For some years, the customers of the cooperatives already have debit cards. The records of Financoop indicate that there are 450,000 plastics issued. Of that amount, 80% belongs to users of the cooperative JEP.
According to statistics from Finan coop, currently the sector of the popular and solidary economy has about 8 million customers nationwide. Among the largest cooperatives are JEP and October 20. (I)