LatinNews Daily - 29 March 2023

In brief: Colombia seeks to widen access to credit

* Colombia’s Finance Minister José Antonio Ocampo has announced a new scheme to provide credit to citizens who do not have access to formal financing mechanisms. According to a statement from the finance ministry, the scheme will “meet the financing needs of traditionally neglected small-scale productive units, across the country and in all sectors of the economy, replacing the onerous informal sources [of credit] which predominate”. The statement said that the scheme, which was developed in collaboration with the Inter-American Development Bank (IDB), will provide a million loans to citizens who are not currently part of the formal financial system or do not have access to regulated sources of credit. The loans will be provided by the state-owned financial entities Bancóldex, Finagro, Banco Agrario, and Fondo Nacional de Garantías (FNG). The launch of the credit scheme follows criticisms from President Gustavo Petro of widespread but illegal ‘gota a gota’ loan sharks, who lend small amounts of money at high interest rates and demand daily repayments, often under the threat of violence.

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