General Credit Union: The challenge in 2022 is to reinvent the figure of credit union


The Covid-19 pandemic and its variants and the elections were the ingredients that kept companies in Mexico and the world on the lookout, however, last year was better than expected, as Alberto de la Fuente commented. , Chairman of the Board of Directors of the General Credit Union.

“Some companies have already begun to reactivate, the problem is that the financial information of many of them was deteriorated due to the stoppages that occurred and some even entered non-performing loans. Now that the economy is recovering and they are beginning to receive orders, it is difficult for them to access credit, in addition to the fact that the costs of energy, transportation, and raw materials have risen, and the working capital that they budgeted before is no longer available. currently enough,” he said.

He insisted that small and medium-sized enterprises (SMEs) are going through a difficult time, despite the fact that they already have orders, they cannot supply them due to lack of resources and financing cannot be granted because their financial statements do not qualify before credit institutions and to this, it is added that the development banks that previously participated with guarantee programs that could alleviate the situation, have not responded to support SMEs.

“The placement of credits has fallen, many existing credits have been restructured since the flows do not give them and the credits have to be updated to their new flows,” said Alberto de la Fuente in an interview with The Economist.

storm clouds

The also director of ConUnión said that this year will remain as the last quarter of 2021 with some recovery, but there are clouds that will remain in the short term and that will affect projects and decision-making for new developments. of all kinds of companies.

“There are some black clouds on the horizon, such as the case of the Energy Reform, the pandemic is not over, interest rates and the peso-dollar exchange rate have rebounded and inflation has not been able to be contained, and this it would lead to interest rates continuing to rise, to the scarcity of raw materials and to the continuation of high costs in national and international transportation”, considered the president of the Board of Directors of the General Credit Union (UCG), a financial institution located in Puebla.

The figure

The figure of UC was born in the early 1930s and at this point it no longer corresponds, although there have been changes, it must be reviewed so that it adapts to current circumstances and responds better to employers, he said.

“There are always areas of opportunity to improve, adapt to new circumstances, and this must be done in conjunction with the development bank. A more digital second-tier bank in its procedures with financial intermediaries, in addition to reviving the guarantee programs that existed for first losses and seed capital support for companies.”

funding

He explained that most CUs are funded by their partners, “the least of us are funded by development banks and commercial banks.”

He said that commercial banks have become very strict with the type of guarantees that they request for credit lines. Sectors such as construction and finance have restricted guarantees or have limited guarantees for credit operations.

“For 28 years we have been mediating with all the development banks, today as there has never been a very great distance, with the exception of FIRA. There have been many changes in management teams and some continue to work from home offices. Development banking has never been so absent, and nothing new is seen, no program to support companies”, he lamented.

clauses

There are some contracts with development banks that establish a penalty for not exercising the line of credit in its entirety, even in a complicated situation such as the one that has been experienced for almost two years. “The Condusef, an organization that protects the rights and interests of users of financial products and services, prohibits and sanctions financial intermediaries for the use of penalty clauses for non-compliance with the clauses of their contracts.

“However, they do not monitor or intervene when the development banks or Development Trusts do include in their contracts, with the financial intermediaries they accredit, clauses with monetary sanctions for non-compliance with any section that, in other instances, would be considered abusive since out of proportion to the action committed. It is not taken into account that financial intermediaries are the channel through which resources are distributed to promote the economic growth of the country”, concluded Alberto de la Fuente.

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