Small businesses have accessed USD 146.9 million in microcredit so far in 2023 with interest rates averaging 22%.
loss small business in Ecuador, with Annual sales up to USD 5,000 They can get loans for small amounts, known as retail microcredit or nano credit.
For example, a person who has a business selling homemade sweets with a monthly income of around US$400 is a potential customer for these loans.
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are in the market financial institutions who approve nano credit from $100, such as Banco Pichincha. Other institutions compete with credits as low as $300, such as Cooperative Cooperogreso.
Disbursement of these small amounts of loans by public and private banks and cooperative societies Total USD 146.9 million, In the first quarter of 2023.
According to the Central Bank, 85% of that value was delivered by private sector entities.
Thus, in retail microcredit disbursement a 28% increase Compared to the same period in 2022.
rising average microcredit
He number of customers The number of people who received these nano credits also increased, but the growth was less rapid than that of disbursements in dollars.
approved institutions 54,793 such microcredit in the first quarter of 2023; only one 4% more Compared to the same period in 2022.
the above shows that money is falling into fewer hands says Valeria Llarena, executive director of the Network of Development Financial Institutions (RFD).
Llarena explains that 15 years ago, the average microcredit loan was from the retailer usd 300but now it is of USD 2,680.
In fact, in institutions such as Banco Solidario number of appointments of these credits fell 32% In the first quarter of 2023, compared to the same period in 2022.
One barrier to greater access to these credits is that they are high percentage of informality Among those occupations whose income is less than the basic salary per month.
there is 28.2% annual interest rate cap Santiago López, director of microenterprise business at Banco Solidario, says financial institutions can collect.
The Financial Regulation Board is the body that sets these ceilings.
Although average annual interest rate was by under the cap It was 22% in the first quarter.
But for some entities, expenses it means keeping these credits are often more What the board is allowed to charge by way of interest rates.
For this reason, explains López, institutions prefer to lend in higher amounts for lower costs.
in addition cost to institutions They have also increased due to increase in Rate of interest In the United States, because Ecuadorian entities usually request loans abroad in order to have credit with their customers in the country.
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Increased insecurity is another challenge. small businesses that are victims of extortion Venture reduced your income level To make criminals pay, says Llerena.
And, the third problem has been the severe winter. financial institutions have advisors that goes into the field rural or peripheral areas To keep these loans.
But heavy rains have destroyed highways, back roads and bridges, making it difficult Access to consultants in these areas.
Microcredit for large businesses
Other than this Minorist Microcredit or NanocreditBusinesses that have more than US$5,000 in annual sales can use other types of microcredit:
- Simple savings for businesses with annual sales between USD 5,001 and USD 20,000.
- and Extended Accumulation, for those with sales between USD 20,001 and USD 100,000 per year. It is the most sought after, as it serves a sector that has more formality, more stable businesses and greater ability to pay.