The unsecured loans of the Banco del Instituto Ecuatoriano de Seguridad Social (Biess) have been in high demand so far this year. Between January and September, the entity disbursed USD 1 850 million through 1.5 million operations, according to figures from the entity.
The amount of financing is close to the USD 1 939 million that were budgeted for the entire year for the loan product. However, the general manager of the Biess, Eva García, announced yesterday (Monday, October 15, 2018) that the goal will increase by USD 621 million, with which the Bank of affiliates plans to close 2018 with an outlay of USD 2 550 millions in these consumer loans.
Andrés Vergara, economic analyst, attributed that the increase in credits is the product of a decline in employment and a rise in the cost of living. “The Biess should analyze the clients that are looking for a loan, because if they do not pay, it affects us all.” According to information provided by the clients themselves at the time of requesting the loan, the main use that the active and retired members give to the unsecured Biess is to cancel debts.
Of the USD 2 242 million disbursed by the entity in 2017 in unsecured loans, 42.8% was destined to pay debts, according to data from Biess. Health expenses occupy the second place. Mauricio Pozo, economic analyst, stressed that the refinancing of certain obligations is positive in an environment of “stagnation”, especially for sectors of the population that are relegated from traditional financing.
“The important thing is that the level of financing is low, but the underlying problem must be corrected: reactivating the economy,” he added. The interest rate on these loans is more competitive than in private banks.
For affiliates, it is between 11.65% and 14.65%. In the case of retirees, the rate ranges from 11.56% to 13.79%. These credits are requested through the web portal of the financial institution, without the need of a guarantor. The disbursement is made in maximum 72 hours, from the date of approval.
On the increase of the Biess goal in this type of loans, Pozo believes that this will help mitigate the lower loan placement announced by private banks, due to the fact that deposits are growing at a slower pace. Seeking to give greater dynamism to these loans and liquidity to the economy, the Biess has announced six new unsecured products, intended for young entrepreneurs; micros, small and medium enterprises; adults of the third age; mothers who are heads of household, among other groups.
The Biess Manager indicated that 70% of the loan requests are for credits of USD 1,000, on average. The financial institution has also announced a new mortgage loan, at an interest rate of around 6% for a term of 30 years. The current term is 25 years. “It is a product that is part of the Casa para Todos plan, with homes of up to USD 35,000,” Garcia added.
From January to September, the entity has disbursed USD 65 3 million in mortgage loans. It foresees closing the year at 933 million, an amount below the initial goal. According to the Biess evaluation, about 440,000 affiliates qualify for this type of credit.
The agency explained last week, within the framework of the Fair Housing, in Quito, that this product would be granted to members or retirees who receive from a basic salary up to USD 1500 per month. As a support to the construction industry, the head of the Bank said that this year USD 110 million are being allocated to different types of investment in the stock market and USD 250 million are foreseen for next year.
“The purpose is to improve the sustainability of the funds through better performance and management of the same, minimizing risks.” In addition, the official announced a reactivation of the real estate trusts today detained and representing an investment of USD 200 million. “We are going to solve this with the counterpart of the private sector. We have 90% advanced buildings. ” (I)