Bank knocks on door of private businesses

One of Cuba’s principal financial institutions has adopted a more aggressive strategy approach to a sector that doesn’t show much enthusiasm about the credit offers created in 2011.

The Cuban economy continues opening spaces for the private sector with alternatives that try to strengthen, on a par, the projection of national banking. Through the creation of the “administrators of private workers,” the Banco Popular de Ahorro (BPA) this year resorted to a new strategy to approach businesses that, until now, have preferred to seek financing at non-official doors.

The so-called “cuentapropistas” (self-employed workers) have shown a very weak reaction to the credit offers Cuban banks opened four years ago with Decree Law 289. Data from economic institutions indicate that more than 90 per cent of the loans in the new stage are requested by consumers for personal purchases. The non-state sector of shopkeepers and producers, which already surpass the half million, are showing little interest in that direction.


Faced by such a poor response, the BPA, which operates in all the country’s provinces except for the capital, prepared a team of specialists “with the task of accompanying the economic activity of the self-employed,” that entity’s director of Investment Banking, Greicher La Nuez, said.


With the philosophy of “knocking on the client’s door,” the bank aims for “private businesses to have access to assistance for their own enterprise, without having to resort to the branches,” stated the official of a financial institution that defines itself as the bank of the Cuban family.


The BPA is seeking to adapt to the demands of private workers who are reluctant to request credits for reasons that include “especially the lack of habit, trust and culture about the subject,” according to a note by the National Information Agency (AIN). Other officials from that entity also recognise their lack of experience in the service of that economic segment.


The administrators of private workers even go to the private enterprises to try to convince them of the advantages of consulting their businesses with the bank. But they especially have the mission of attracting them to contract bank credits.


According to La Nuez, the BPA attracted through this means between 40 and 45 per cent of the total of loans set up during the last four months. In the face of such results, the bank is assessing the possibility of increasing the number of administrators.


In addition to encouraging the contracting of credits for the financing of investments and private enterprises, with this new figure the bank hopes to also promote services like electronic banking. Through this alternative, only offered before to legal entities, the client connects to a website to make the transactions of funds and receive information regarding their accounts.


With this expansion of services, the BPA is following the steps of a rival, the Banco de Crédito y Comercio (Bandec), recognised as the institution that has most financed private workers since the approval in 2011 of the new credit policy.


Up until now, however, Bandec has only given out close to 30 million pesos for this and the beneficiaries represent barely five per cent of the half million private workers registered in the country, according to figures reported by that entity.


To eliminate that aloofness, the bank has tested more attractive interest rates, has simplified the documentation and has readjusted the grace periods. It has also created its own alternative to attract private workers, the “administrator of microcredits,” with the aim of providing them with assistance. (2015)

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