Thursday, July 30, 2020

Only 3 out of 10 eligible small businesses applied for government assistance

The micro-business loan closes records with just over 180,000 beneficiaries within a few ‘hours of life’, as their records will be closed at midnight. Until May 15, the word solidarity credit program registered 180 thousand 193 approved applications, reported this Friday Zoé Robledo, general director of the Mexican Institute of Social Security (IMSS).

This program still has a few ‘hours to live’, since at midnight its records will be closed. You will continue to receive applications, but will now be focused on domestic workers and self-employed workers. The goal of the program was to reach 645,102 loans for microentrepreneurs who did not fire personnel during the COVID-19 pandemic. This meant that only 28 percent of the universe of eligible microentrepreneurs were interested in acquiring a loan of 25 thousand pesos from the Government. Robledo said that so far the credits had already been deposited in 137 thousand 283 accounts, representing an advance of 76 percent of the total number of applications approved, as well as a dispersion of resources of 3,343 million pesos.

In turn, Omar Mejía, deputy treasurer of the federation, said that these transfers have been made through 35 SPEI participants. The director of the IMSS took advantage of the press conference to compare the National Microentrepreneur Financing Program (which was granted in previous administrations) against solidarity loans to the floor. Zoé Robledo noted that between 2001 and 2018, 18 million of these loans were granted to microentrepreneurs.

“The program exercised 20 billion pesos in microcredits with financial intermediaries in 18 years, while the interest rate charged by the intermediaries ranged from 30 to 120 percent,” he said. In contrast, the official added that in solidarity credit to the floor there is no guarantee, intermediaries or a credit history is requested, and that the interest rate is only 6 percent. On the other hand, the Ministry of Economy reported that the word credit program for micro-businesses has already activated 209 thousand 638 bank accounts, which meant a dispersion of resources of 5 thousand 240 million pesos.

“It is not possible to go faster because we have to respect healthy distance measures, which implies a dosing of accounts because they are processes that have to be done at the branch,” said the agency.

Source: El Financiero

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