The Board of the BCRA adopted three measures today aimed at facilitating lending to MSMEs. The purpose of these measures is to further strengthening lending channels to one of the main drivers of the local economic and to reduce interest rates charged to MSMEs while upholding current prudential criteria for the proper operation of the financial system.
The measures so adopted are as follows:
– Relaxation of minimum capital requirements: at present, banks must keep ARS6 for every ARS100 granted to MSMEs in loans under ARS10 million. This limit will be raised to ARS30 million to encourage banks to grant loans that have greater requirements at present. This decision is in line with international standards recommended by the Basel Committee.
– Rechanneling of minimum reserve requirements: banks may use funds from minimum reserve requirements to grant credit lines for MSMEs and finance the Ahora 12 program, as supplemented. The measure does not mean any change in the current percentages of minimum reserve requirements and its monetary effect will be neutral.
– Discount of checks: the 15% cap on financial institutions’ regulatory capital is removed to consider discounted documents as preferred-collateral. Thus, banks may apply lower provisions to these transactions and, in turn, MSMEs will have more chances to access lending. In turn, the relaxation of minimum capital requirements does not change the prudential regulation on credit diversification and grading to reduce institutions’ risk exposures.
The BCRA’s provisions are provided for in Communication A 6531 and will become effective on July 1.
