New Regulatory Scheme of Financial Incentives for MSMEs

Within the framework of the regulatory normalization and simplification process, the Board of the BCRA has established a scheme of incentives to boost financing channeled to MSMEs.

The MSMEs Minimum Quota will be effective from April 2024. This is a simplified incentive scheme intended to promote credit assistance by easing minimum reserve requirements.

Financial institutions will benefit from a reduction in minimum cash requirements (reserve requirements) where the average stock of loans to MSMEs equals at least 7.5% of their deposits from the non-financial private sector in pesos, and where a 30% of such amount is channeled to investment projects with a minimum average term of 24 months. Interest rates shall be freely agreed by the parties.

Financial institutions that finance MSMEs' investment projects for an average term greater than or equal to 36 months will be able to reduce their minimum cash requirement by an additional amount (40% of the amount financed). This measure seeks to encourage institutions to grant longer-term loans.

The BCRA is determined to continue undergoing a regulatory normalization and simplification process as macroeconomic conditions continue to stabilize. This process is expected to keep on deactivating subsidies that have been granted as "artificial incentives" and entailed a quasi-fiscal cost to the BCRA and higher money issuance.

March 21, 2024