Credit in Venezuela, which has been frozen since 2018, has been reactivated in recent months and has increased to 29,900%, an increase that, however, does not represent an improvement in the ability to prosper through financing, which does not exceed 300 bolívares -about 60 dollars-, according to experts and consumers.
Clients of private banks told Efe that, since last April, the limits on their cards have been increased from 1 bolívar ($0.19) to 150 bolívares ($29.64) and up to 300 bolívares ($59.28), which which represent increases of 14,900% and 29,900%, respectively.
In this regard, the chief economist of the consultancy EcoanalyticsLuis Arturo Bárcenas, told Efe that banks, in a cautious manner, have begun to increase consumer credit upon seeing that part of the population reports an improvement in their income due to the unofficial dollarization of the economy, one of the the engines of the partial reactivation of the country.
“We are in a dollarized environment, and that, probably, the banks are seeing as good news in terms of repaying their loans. In an environment where people now declare more income in dollars, however high the cost of credit, it is more likely that your ability to repay the credit, even if it is very small, is greater, “he said.
Last April, the credit portfolio reached 415 million dollars, which represented an increase of 219% compared to April 2020, when it was at 130 million dollars, according to calculations by Ecoanalítica.
Insufficient
Bárcenas stressed that, however, these increases do not reflect a recovery in financing for households, which need an average of 481 dollars to acquire the basic food basket, according to independent estimates made for a family of 5 people.
He pointed out that, currently, there is no “normal and traditional” financing in Venezuela that “promotes investment, purchases of capital goods and that people have a much more hopeful vision of the future.”
«You no longer see as before, (…) at the time of 2006, that people could easily buy an apartment or a car. (…) What you are financing right now is pure current spending, nothing more than that, and not all Venezuelans, as it once was, have access to credit cards,” he assured.
For Roberto Porciello, a 56-year-old engineer, a private bank increased the limits of 2 of his cards from 1 to 300 bolivars, after being frozen for 4 years.
«(It is not) not even half of the basic basket. That would be basically for parking, very small things, a couple of canillas (loafs of bread), a quarter of a kilo of ham, very small things, it does not give you as it was before that you had limits of up to 2,000 (or) 3,000 dollars. Depending on the type of card, you had limits that you could buy anything,” she said.
The decline of funding
According to Bárcenas, the decline in financing has several causes, including the economic fall since 2013, the hyperinflation that the country experienced from 2017 to 2021 and the pandemic, factors that reduced the capacities of households and companies to pay credit , which made banks more cautious when lending.
The credit portfolio has fallen 98% since April 2012, when 32,000 million dollars were lent, according to calculations by Ecoanalítica.
But “the peak point”, he said, was from 2018, after the entry into force of the government plan for “economic recovery”, with the “successive increase in banking reserves”, a measure that forces banks to maintain a percentage of its deposits in the Central Bank of Venezuela (BCV), which cannot be used, and which has been applied to contain the exchange rate.
In lace it reached 100% in 2019 and has been gradually reduced to 73% last February.
dry credit industry
Manufacturing, for its part, is today one of the sectors hardest hit by lack of financing.
According to the most recent study by the Confederation of Industrialists (Conindustria), 55% of entrepreneurs financed themselves with their own capital in the first quarter of the year.
Bárcenas added that the only priority sector that today receives “relatively high” financing is the agriculturalin addition to trade, which uses the credits, among other expenses, for the importation of products.
“There are still sectors completely ruled out of credit, including manufacturing,” he said.