EFE / 14ymedio, Havana, 2 September 2015 — The self-employed in Cuba may borrow up to 10,000 Cuban pesos ($400 US) without submitting financial guarantees or guarantors, and the loan may be approved within three days, the official media reported today on the island.
The measure by the People’s Saving Bank (BPA), which operates throughout the country except in Havana, will take as a guarantee a “developing” savings account, explained Greicher La Nuez, BPA’s director of Business Banking to the State National Information Agency.
The deposit will contribute to the amortization of the debt (if the payments are 200 pesos a month, 50 will remain in the account), said the functionary, who said that the accumulated savings could serve as backing for another loan, once the first loan is paid off.
Cuban banking authorities – who recognize that this operation is “risky” – say they will perform a “rigorous analysis” of the feasibility of the borrower’s business and its “chance of success,” as well as the applicant’s history, before issuing the loan.
Among the relaxations that benefit this “growing economic sector,” BPA increased the “grace period” and the repayment period (previously five years and now up to ten), as well as “reduced the minimum credit threshold and the cumbersome documentation.”
The Cuban State banking entity also recently allowed its municipal branches to offer credits of up to 100,000 pesos ($4000 US) – the previous figure was 20,000 – “without requiring higher levels of authorization,” according to BPA’s management.
Some 2,482 self-employed people applied for loans to “buy goods and maerials” at the end of this last July, said the note, that insists on the “reduction” of this number in the midst of the boom experienced by the private sector thanks to the economic reforms initiated by Raul Castro’s government in 2010.
According to official data, the number of self-employed in Cuba surpassed half million at the end of May of this year, for a total of 504,613, a figure that keeps rising.
Self-employment or the expansion of the private sector is one of the main measures taken by Raul Castro in his plan of reforms to “upgrade” the economic model of the island.