Banecuador will forgive overdue loans for some 27,000 clients. Most of them are located on the Coast, according to the manager in charge of the institution, Fernando Chiang.
A BanEcuador agency in Putumayo, on July 8, 2020, which provides loans to businesses through the Reactívate Ecuador program.
As of July 27, 2022, BanEcuador will begin the process of canceling debts of up to USD 3,000 that are overdue for more than 180 days, as provided by executive decree 456, issued by President Guillermo Lasso .
The main beneficiaries are debtors from the Costa region.
In an interview with PRIMICIAS, Fernando Chiang, general manager of BanEcuador, explains who are the main beneficiaries of the measure and of the new lines of credit at an annual interest rate of 5%.
How many customers will have debts up to $3,000 forgiven?
There are around 27,000 clients, that means about USD 44 million. We are preparing all the reports, because this has to be approved by the Board this week. Once that procedure is fulfilled, we will begin the forgiveness of debts.
Do customers need to do any paperwork?
We are going to do it automatically, so it is not necessary for customers to go to the bank.
They will receive an SMS message or an email, if they have one, where they will be told that the remission has been made.
For those clients who wish to have a certificate, they can approach any of the bank’s agencies. We expect the procedure to start next week.
What is the profile of the people whose debts are going to be forgiven, what type of credits had they requested?
The forgiveness will cover all segments served by BanEcuador, but the largest number of placements made by the bank is in the agricultural segment, approximately 70% or 80%.
On a national scale, the strength of the forgiveness will be concentrated in the province of Manabí, with USD 11.2 million; Guayas follows, with USD 9.8 million; Los Ríos, with 9.2 million, while the entire part of Imbabura, Carchi, Cañar and Cotopaxi add up to about USD 500,000.
Indigenous populations are concentrated in these areas and this is one of the demands to stop the national indigenous strike. Why is the portfolio smaller there?
It is because of the behavior of the debtors, the payment culture of the Sierra segment is much more orderly than on the Coast, it is something cultural.
But with the decree the country is being covered, there is not so much incidence in the Sierra, but it is important to say that there are also many indigenous people on the Coast.
The forgiveness was established in the law approved in November, but it was for up to USD 10,000.
The Organic Law for Economic Development and Sustainability refers to the forgiveness of debts and indicates that it can be up to USD 10,000 and that it would be implemented through a decree.
The decree already exists and says that it is up to USD 3,000. We must bear this in mind: the resources with which BanEcuador is funded belong to the public, which is why we must act with financial prudence.
How much does the USD 44 million mean within the bank’s general portfolio?
In clients they mean 9% and, in amount of operations, approximately 3% of the total portfolio. We have a portfolio of more or less USD 1,450 million of credits.
Banks have to classify the portfolio and the micro segment is based on overdue terms.
We have customers A1, A2, A3, D1, D2, C, D, E, depending on the number of days overdue. When a portfolio is already 180 days past due, it is rated E and a 100% provision must be made.
The other point of the decree refers to credits at 1%. How are they going to be done and what are the requirements?
The decree speaks of a new line of credit of USD 100 million, with resources from the bank and we are working on it. The credits in this line would pay an annual rate of 5% and would have a term of 10 years.
This line is going to have an interest rate subsidy by the different state portfolios of four points.
And it covers another segment, which ranges from USD 5,001 to USD 20,000. It is a reinforcement to support and activate the country’s economy.
This is a complementary loan to the Creating Opportunities program, which is up to USD 5,000, at a rate of 1% for a 30-year term.
The requirements are basic, a copy of the identity card, voting certificate, the credit application and some plan or scheme that tells me what they are going to invest in so that the resources, which are subsidized, are not diverted.
