Hundreds of thousands of entrepreneurs and natural persons are being excluded from being able to access a creditdue to the Interest Rate Caps Law approved by the Congress of the republic last year, warned Jorge Delgado, president of the Association of Microfinance Institutions of Peru (Asomif), which brings together banks, rural savings and credit banks, municipal banks and formal EDPYMES.
“The entities specialized in microfinance are experts in evaluating and granting loans to people or businesses with a higher level of risk, that is, those who do not have a credit history or who cannot prove income on a regular basis. Being subjects with greater risk, they are charged a higher interest than a banked person or company. However, by setting rate ceilings, as the law approved by Congress does, financial institutions exclude people or businesses with a higher level of risk, since the rate does not cover their risk. They prefer not to lend,” explained Delgado.
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The Asomif spokesperson added that, by being excluded from the formal financial system, these individuals or businesses are financing themselves with informal moneylenders or lenders, in many cases belonging to mafias, who charge rates much higher than those offered by the formal system.
“The loans of the formal system are safe and do not expose people or companies to any type of risk. On the contrary, formal credits even have relief insurance. On the other hand, informal loans, to which the excluded are resorting, not only generate agiotista interests, but also expose them to criminal collection methods that even end people’s lives, as can be seen in the news almost daily,” Delgado warned.
According to the expert, the warning reports prepared by the Ministry of Economy and Finance, the Superintendence of Banking and Insurance or the Central Reserve Bank were of no use, because the law was enacted without a minimum of impact analysis on the vulnerable people have access to formal productive financing and have forced them to go to an informal market that offers them microcredits with interest rates between 20% and 800%.
Delgado, called on the highest authorities in the sector to rethink this law that is “killing Peruvian entrepreneurship”, which ranges from students who want to start a business because they cannot enter the labor market to the owner of a restaurant who wants access a motorcycle to deliver, for example.
“I call on the Board of Directors of Congress, the Ministry of Economy, the Congressional Economy Commission, the Executive Branch not to limit credits, to act responsibly, and to take into account what is happening to restore these 266 thousand Peruvians to the formal financial system. It is important to explain to them that this law that was passed is harming Peruvians, not allowing them to have a credit record or be protected by law”, he emphasized.
It should be noted that, since May 2021, financial entities are required to respect a maximum interest rate set by the Central Reserve Bank of Peru (BCR). For the period between May and October 2022, the maximum interest rate is 83.70% for national currency and 67.36% in foreign currency, as reported by the BCR in April.
