In order to demonstrate that the current Peruvian financial system does not contribute to national development, we publish summaries of the average annual effective rates (TEAS) of credits for working capital and fixed assets to micro-enterprises (MES), which grant the financial entities.
Likewise, we determine the average rate of the system by destination, currency, terms and amount of credit. Prepared with information as of 7-01-2006 from the SBS banking and insurance superintendency portal.
1) Average TEA for working capital in nuevos soles:
- 6 multiple banking companies 99.38% 14 municipal savings banks 64.35% 12 rural savings banks 63.37% 14 edpymes 78.17%
System average TEA 76.32%
- 9 multiple banking companies 65.40% 14 municipal savings banks 50.53% 12 rural savings banks 57.63% 14 edpymes 65.35%
System average TEA 59.73%
2) Average TEA for fixed assets in nuevos soles:
- 2 multiple banking companies 68.70% 14 municipal savings banks 62.11% 11 rural savings banks 59.38% 14 edpymes 74.81%
System average TEA 66.25%
- 2 multiple banking companies 51.34% 14 municipal savings banks 47.15% 11 rural savings banks 53.37% 14 edpymes 62.01%
System average TEA 53.47%
3) Average TEA for working capital in US dollars:
- 5 multiple banking companies 70.07% 13 municipal savings banks 38.98% 10 rural savings banks 36.11% 10 edpymes 50.38%
System average TEA 48.89%
- 8 multiple banking companies 52.76% 14 municipal savings banks 36.25% 11 rural savings banks 33.81% 10 edpymes 43.03%
System average TEA 41.46%
4) Average TEA for fixed assets in US dollars:
us $ 1,000 with repayment in 24 months
- 3 multiple banking companies 48.24% 13 municipal savings banks 38.37% 11 rural savings banks 33.37% 10 edpymes 48.04%
System average TEA 42.01%
- 6 multiple banking companies 36.68% 13 municipal savings banks 32.63% 11 rural savings banks 31.61% 10 edpymes 39.24%
System average TEA 35.04%
To calculate the average rates, I have taken the monthly reference rate consistent with the IRR, which includes the payment of the compensatory interest rate, the return of the principal, credit insurance, postage and disbursement commission, published by the SBS.
We also highlight that the Peruvian financial entities distinguish the loan portfolio in 4 types: commercial loans, microenterprise loans (month), consumer loans and mortgage loans for housing.
In each case the cost of credit is different.
Thus we have that the so-called commercial credits (which are generally accessed by large companies) direct or indirect granted to natural or legal persons intended to finance the production and marketing of goods and services in their different phases, have a global average TEA of 9.08%. very different from the costs charged to the mypes, whose average TEAs we indicate in the previous tables.
The bulky difference between the TEA of commercial loans and MES microenterprise loans is because the financial entity assumes that the large company (mostly from the conglomerate that makes up the financial entity) has zero risk and operating costs, while the small businessman represents high risks and for the same reason adds higher operating costs.
The risk (one of the three components of the interest rate) or degree of variability and contingency for the return of an investment, is arbitrarily manipulated. Risk is a subjective element, based on the premise that will you pay or not pay?
Comparing these TEAs with the passive rates of the Peruvian financial system, we have that the resulting SPREAD or financial margin (active rate - passive rate) is quite high.
Deposit banks pay an annual average of 0.84% in national currency and 0.58% in foreign currency.
Despite being low rates, it is unrealistic for the saver, since the financial institution erodes these savings with high maintenance costs, commissions and insurance.
The TEAs of credits to MYPES are excessive due to the inclusion in the current rate of high disbursement commissions, verification commissions, administrative expenses and fictitious insurance. These TEAs, equivalent to the IRR, are unknown by the lender when it comes to signing a loan.
It is necessary to mention that the commercial credits do not have ceilings as if they have the credits to MES micro-companies that should not exceed US $ 30,000 or its equivalent in national currency.
Financial institutions in Peru generally channel funds from COFIDE, with preferential rates, which are never disclosed as such. We also stress that the entire fund managed by COFIDE can be channeled to MYPES.
Credits for MYPES and individuals are placed at high rates.
The strategy for allocating resources to mypes is based on the individual evaluation of the borrower and not on the project associated with the line of credit.
Finally, the formation of an alternative bank based on the associative nature of the micro and small businessman is imperative.
Likewise, local and regional governments that enjoy economic, administrative and political autonomy must become promoters of this ethical and solidary bank for development, which as a strategy for allocating resources favors viable and sustainable development projects, with deadlines and rates for production.
“The unity of the MYPES, with a common strategic objective, is to promote the internal development of the country aimed at raising the quality of life for all Peruvians; unit that must allow in the short term to implement an alternative financial system for national development. The MYPES, have everything necessary to create their financial entities, such as more than 33 billion dollars per year of the GDP, in addition to a thriving business and labor market ”.
