The Government of Ecuador has refused to forgive debts of up to US$10,000 (9,700 euros) after the Ministry of Government indicated that it is not feasible to forgive debts of more than US$3,000 (2,900).
According to the Ministry, to apply the forgiveness of debts up to US$10,000 -as requested by the peasant organizations that participated in the demonstrations last July- «would put at risk» Banecuador, the country’s public bank, as reported by ‘El Comercio’.
The Executive argues that Banecuador has already applied an automatic remission of debts of up to 3,000 dollars and that there is no financial viability to increase the mechanism at present, since up to now 60 million dollars have been invested in the measure.
Banecuador has argued that the new remission would have put at risk the management of resources of more than two million clients, as well as that of 180,000 beneficiaries.
However, the government has reminded that debtors have at their disposal facilities with public banks, including debt restructuring and rescheduling, as well as «credits with preferential conditions», according to the newspaper.
Ecuador’s Minister of Economy, Pablo Arosemena, has reiterated that forgiving debts of up to US$10,000 would put Banecuador’s institutional stability at risk.
«This cancellation has been granted without any kind of effect, but any dollar above that value does represent a damage to Banecuador», the minister said, as reported by ‘Telegrafo’.
The Minister of Economy detailed that the bank had losses of 83 million dollars (80 million euros) until September 2022, and that if the cancellation is accepted, the public financial entity would stop charging 190 million dollars to about 25,000 clients.
«We have to be prudent and consistent with an orderly management. It cannot be allowed to put at risk the patrimony of an institution that today serves to help entrepreneurs to move forward. Condoning is condemning entrepreneurs to the risk that no one will want to lend to them again,» added Arosemena.
