Peruvian government's proposal for State-owned banks to promote loans for SMEs will contribute to their access into attractive credits, World Bank Group (WBG) Senior Financial Sector Specialist Luis Treviño affirmed.
"I think there will be an impact on financing costs in favor of Small and Medium-Sized Enterprises (SMEs), although I do not know by how much," he told Andina news agency.
Last week, Economy and Finance Minister Alfredo Thorne commented State-owned banks would boost loans to national SMEs through second-tier mechanisms, as well as bank guarantees to reduce credit risk.
During the 5th Energy Day, the government official said such strategy aims to generate a "credit boom," as he warned about credit slowdown.
The government's idea is to use credit as a tool to formalize enterprises and provide them with access to lower financing costs through four institutions: Cofide (development bank), Banco de la Nacion, Fondo Mivivienda (housing fund) and Agrobanco (agricultural bank).
Lower credit risk
Treviño pointed out interest rate improvement (or lowering) is related to the existing credit risk among clients. In the case of SMEs, bank guarantees will reduce such risk.
He also noted there are opportunities to further develop banking in the country, since Peru presents a major gap regarding the use of financial services compared to other countries in the region.
"I think efforts should be oriented to further promote financial system use. In this sense, it is worth noting works on financial education and increasing transparency," he observed.
Lower-income clients and rural population are some of the groups using the financial system the least, the WBG analyst added.
Likewise, he stressed the need to emphasize a financial education policy among youth to prevent over-indebtedness, particularly in a context of increasing financial services supply.
Remarks were made during the 3rd National Forum on Education and Financial Inclusion 2016 organized by the Peruvian Banks Association (Asbanc).
(END) MMG/JJN/DHT/MVB