SME loans: despite government complaints, private banks lent more than public ones

Loans for SMEs to pay wages to their employees, with a subsidized rate, were one of the first official measures to alleviate the lack of income of small businesses generated by the quarantine. Its delayed implementation resulted in the fact that of the $ 220 billion available in the financial system for that purpose from the end of March, until May 5, $ 141 billion had been effectively disbursed to companies.

There was strong criticism from the government against the financial sector for the slow placement of loans. But According to official data, private banks lent more money than state banks, even though it is known that the latter outnumber the former in loanable capacity., since they have funding from the public sector. They also have greater capillarity, since state banks are usually present in localities where the private ones are not.

Of the $ 141 billion loaned to more than 91,000 SMEs at a special rate of 24% between March 19 and May 5, the private nationally-owned banks grouped in Adeba granted $ 59 billion, 42% of the total, while banks Abappra state and ABA foreign private banks placed 29% each ($ 40,800 and $ 40,600, respectively).

As reported Adeba based on official data, the banks that placed the most were Galicia ($ 25.960 million), Nation ($ 21,828 million), Macro ($ 16,638 million), Santander ($ 15,712 million), BBVA ($ 9,663 million), Credicoop ($ 6.120 million) Supervielle ($ 5.9 billion) and Comafi ($ 5.2 billion).

“The Argentine financial system as a whole, led by the national private banking system, has accompanied the strategy implemented by the authorities in the face of the crisis, assisting more than 91,000 MSMEs with a line of low-cost loans, for an amount greater than $ 141,000 million. This has led to a record loan disbursement in April for the last 17 years, ”Adeba said in a statement.

The slow implementation of these loans, originally launched in March so that SMEs could pay that month’s wages during the recessive April, generated open criticism from the government towards banks., including the president Alberto Fernández.

Against the official message, the data shows that less financial assistance came from public banks than from private banks. Beyond the participation in the cake of the three groups of banks, it is clear that the financing did not reach the companies with the necessary speed and that, a month and a half after its announcement, $ 141,000 million of the available $ 220,000 million were distributed. A survey of the Argentine Industrial Union as a result, 8 out of 10 companies, for different reasons, could not access these credits.

In search of reasons to explain why public banks lent less than private ones, the economist Fabio Rodríguez, of M&R Asociados, risked: “The unprecedented exercise of rating and granting credits with closed branches cost the state banks more. They surely paid a learning cost in a new and emergency environment. Private banks were more efficient or agile to put together the folders, receive documentation and make all the necessary arrangements to grant the loan in special circumstances. ”

“Also, nOr it would rule out that public banks had started in February, before the Covid-19 was on the scene, to place loans for SMEs, thinking of reviving the economy. In this area, private banks were anticipatedRodríguez added. This factor could be relevant since the need for financing due to the pandemic may have come when state entities had already put funds on the street. The Bank provinceFor example, it launched specific lines for SMEs during the summer.

Finally, the analyst mentions a third hypothesis to explain the situation, in which public banks plan to meet the needs of their shareholders, that is, the state. Just as the pandemic drove corporate turnover, it also eroded tax collection. “Surely, they kept an eye on the need to finance the public sector. It is true that there is a lot of liquidity, but it is necessary to adjust to the rules and distribute it among the different demands.Rodríguez explained.

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