Asobancaria Rejects Further Forced Investments Proposed by Petro, States Credit Pact Has Been Fulfilled
Jonathan Malagón, president of Asobancaria. Photo: Courtesy
TL;DR
- Asobancaria rejects President Petro's call for more forced investments, warning of increased financial repression.
- The banking association claims the 'Pacto por el Crédito' has been fulfilled, with substantial loans disbursed to the Popular Economy and agricultural sectors.
- Additional forced investments would reduce funds available for loans to non-prioritized sectors, leading to higher interest rates and reduced credit portfolios.
- Current financial repression in Colombia is high due to usury rates, forced investment in agricultural securities, and restrictive credit cost regulations.
- These restrictions hinder financial deepening (currently at 44% of GDP) and credit inclusion (at 51% of the adult population).
- Asobancaria suggests mechanisms like credit subsidies, rediscounting, and guarantees as more effective ways to increase financial deepening and inclusion.