Central Bank of Cuba sets new measures on loans to farmers

HAVANA, Cuba, Apr 30 (ACN) The Central Bank of Cuba (BCC) announced a new set of measures, to come into force immediately, on credits and financing to farmers, in view of disagreements in this matter presented by them and the call of the country's authorities to solve them.
Francisco Mayobre Lence, first vice-president of the BCC, explained that as of January, with the implementation of the Ordering Task, there was an increase in expenses and, therefore, higher financing was requested.

This led to insufficient backing guarantees and generated nonconformity; in view of this situation, alternatives have been sought and there is a set of immediate measures to be applied by the banking system, he informed.

Regarding loans, the principle that loans are granted on the basis of risk analysis is maintained, so that those productions in which the expenses are greater than what is obtained cannot be financed, he said.

In addition, it was decided that the Development Fund established in 2016, which has budgetary resources for the main productions of the country, will incorporate tomato, pork, soybeans and livestock.

The beneficiaries who start farming will continue to receive benefits in financing during the first two years, he added.

Regarding collaterals, it was decided that banks will assume more risk with the financing they grant and it is maintained that if a producer accumulates a good track record it is not necessary to request a guarantee.

There is an important flexibilization in this aspect since the beneficiaries who have been demobilized from the Military Service are not required to present guarantees either; the cooperatives can create funds for the credits to their associates; and to the extent that the individual producers create funds, this flow can be used to back up the financing, he said.

Mayobre Lence pointed out that in the process of banking and services, the need for producers to have a bank account stands out, which allows greater control for granting credits, in addition to making payments for services through mobile banking.

It was recognized that today there are not ideal conditions for electronic banking in all places, since there are around 400,000 producers in the country and they must be reached to facilitate the processes.

The Development Bank, one of the tools that will facilitate production, will provide state resources for long-term financing; initially it will receive funds from the budget for productions that the State considers to be a priority, he said.

The executive recalled that in 2011 the credit policy for natural persons, self-employed and small farmers was updated; rules were established for granting credits, which are granted on the basis of a future income that the person will have.

He recalled that by 2016 the Development Fund had been constituted with budgetary resources for the productions of various crops, cattle, bovine and poultry farming, with low interest rates.

These initiatives have enjoyed acceptance, demonstrated, for example, last year when financing for agricultural activity represented 31 percent of the credits granted to the bank, explained the first vice-president of the BCC.