The BCRA is developing new instruments with a view to streamline SMEs’ access to capital markets in line with a policy that seeks to expand lending at lower financing costs.
The Governor of the BCRA, Miguel Ángel Pesce, and the Head of the Argentine Industrial Union (Unión Industrial Argentina, UIA) discussed the measures that led to an increase in credit lines channeled to SMEs at a substantially low interest rate (20.4%) since the preventive and compulsory social isolation was decreed.
The BCRA is developing new instruments and expanding the scope of existing credit facilities within the framework of a phased program that seeks to streamline access to financing by a heterogeneous group of SMEs.
1. The BCRA launched today the SME Plus credit line. Around 200 thousand SMEs with no credit lines will be able to apply for a subsidized loan at a 24% interest rate.
2. Under the MSME credit line over 92 thousand MSMEs have obtained subsidized loans at a 24% interest rate. So far, loans approved and in the course of approval amount to ARS196,114 million, out of which ARS152,551 million were disbursed as of May 6.
3. The BCRA is assessing whether banks would be allowed to meet minimum reserve requirements with corporate bonds issued by capital market players.
4. Trade acceptances are under review as credit instruments that may be discounted by financial institutions or capital markets.
These instruments go hand in hand with the guarantees provided by the Argentine Guarantee Fund (Fondo de Garantías Argentino, FOGAR), the 0% interest rate loan for self-employed workers whether or not under a simplified tax scheme, the Emergency Assistance for Work and Production (Asistencia de Emergencia al Trabajo y la Producción, ATP) program, and the emergency family bonus (ingreso familiar de emergencia, IFE).
The BCRA Deputy Governor, Sergio Woyecheszen, and the UIA’s Executive Director, Diego Coatz, also attended the meeting. The UIA’s representatives appreciated the measures adopted by the BCRA to streamline SMEs’ access to credit at lower cost of financing.
Financial institutions have expanded lending to SMEs from the date the preventive and compulsory social isolation was decreed. Disbursements rose by ARS 188,500 million, which stands for a growth of 20.4% since then, and of 83.8% vis-á-vis last year.
The private sector also derived benefit from a substantial decrease in the cost of financing—around 50%.
