How are the subsidized loans for SMEs that the Central Bank extended today

The Directory of Central Bank of the Argentine Republic (BCRA) extended until September 30 Line of Financing for Productive Investments (LFIP)which grants special facilities for the development of Micro, Small and Medium Enterprises (MSME).

Launched by the BCRA in the context of the pandemic of COVID-19(femalethe LFIP has become “the main channel through which loans to MSMEs are channeled in Argentina”, according to reports from the highest financial authority.

The average balance of financing granted between October 1, 2022 and January 31, 2023 through the LFIP reached $1.288 billion and said balance represented about 75% of MSME loans and about 45% of total commercial loans.

So far, loans granted through this line have accumulated disbursements for approximately $4.447 billion, reaching more than 379,000 businesses.

According to the standard, financial entities must maintain a funding balance within this line that is equivalent to at least 7.5% of their non-financial private sector deposits in pesos, calculated on the basis of the monthly average of daily balances until in March 2023.

The conditions of the credits granted under the LFIP allowed loans to MSMEs in terms of PBI remain above the pre-pandemic record and above their historical average.

Loans have different conditions depending on whether they are intended for financing of investment projects or the financing of working capital and deferred salary rebates.

In the first case, a 64.5 ratefixed annual nominal %, while the second works with a 74.5% rate fixed annual fee.

In the case of credits with repayments by third parties, the Raw TNA reimbursement to the financial entity, except in the case of grants or subsidies granted by the non-financial public sector.

On the other hand, the central bank established that lines of credit granted for the financing of investment projects should be denominated in pesos and have – at the time of disbursement – ​​a average duration equal to or greater than 24 monthsby weighting for this the maturities of the capital, without the total duration being less than 36 months.

Working capital financing transactions must also be in pesos, but will not have a minimum duration.

In the event of accepted early termination, the right of termination shall be solely in favor of the borrowers.

MSMEs with an agricultural activity registered in the flexible financing lines are excluded. Simplified Agricultural Information System (SISA) as a “Producer” with a collection of wheat and/or soybean production, except that they are classified as micro-enterprises -according to the definition of the Secretariat of Small and Medium Enterprises and Entrepreneurs- and the value of this collection not to exceed 5% of its annual harvesting capacity, estimated on the basis of yields published by the Ministry of Agriculture, Livestock and Fisheries (area declared in the SISA for the average yield published by the MAGyP for each crop).

In this case, if you can participate in providers of human health services, habilitated by the competent body of the corresponding jurisdicción, aunque no reúnan la condition de MiPyME, en la medida en que presten services de internación en el marco de la Emergencia Sanitaria dispuesta for him Decree No. 260/2020 (health emergency) and is intended for the purchase of medical supplies and equipment.

The extent of this exclusion angered the community. “The national government continues without listening to the demands of agricultural producers, once again making financial credit more expensive in the context of a historic drought and a very complicated general economic context,” he said. Nicholas PinoPresident of the Rural Society.

“It looks like they want to melt us down, instead of worrying that production can recover its working capital and that the macro is generating real currency and taking root within the country,” he said. he adds.

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