The president of the National Guarantee Fund, Raúl Buitrago Arias, described the year 2020 as extraordinary for the entity, after reaching out to more than 506,000 companies and independent workers, in the midst of the complicated situation due to COVID-19.
The official highlighted the role that the entity played in the midst of the emergency generated by the pandemic, where it had to be capitalized in about $ 3.25 billion, to respond with all the needs that were presented to entrepreneurs, independent workers and the homes.
In total there were $ 19.8 trillion pesos in loans backed by the entity in 2020, a figure that they expect to increase to $ 37.1 trillion at the end of 2021, where only $ 29.6 trillion would have been specifically placed in the most critical moments of the pandemic and the reactivation of the country.
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Questions and answers
What has been the role of the National Guarantee Fund in the midst of the pandemic?
Here I want to begin by explaining what is the function that we fulfill as a National Guarantee Fund. In reality, we are a guarantor of independent workers, entrepreneurs and Colombian households, because in the long run what we do is enter to cover those debts that for some reason the entrepreneurs cannot meet the banks or financial intermediaries. There is a difference between surety and credit, and we are guarantors, we do not deliver credits. For this reason, when the pandemic arrives and income cannot be generated, where the most difficult thing was to maintain the liquidity of the companies to be able to pay rents, payroll, public services, to suppliers, it was when the Fund began to increase the percentages of coverage to send a signal to financial intermediaries to continue maintaining the liquidity of the companies.
How much did those percentages change in the midst of the emergency that the country experienced?
March split the history of the National Guarantee Fund in two. Before that date, the fund traditionally covered 50% of the debtors’ obligations, that is, for every $ 100 that the debtor loaned, the fund’s guarantee was $ 50 in the event of a default. When the pandemic arrives, one of the warnings given by the National Government was that the liquidity of the companies be maintained through facilitating access to credit, then the guarantees rose in the first instance to 60%, which generated a very strong reaction. important, so they went up to the levels we have today, which accumulate 80% of loans for medium-sized and large companies and cover 90% for micro and small companies.
What is the balance left by 2020?
The result last year was extraordinary. The National Guarantee Fund supported loans in the order of $ 19.8 billion, a figure never seen before in the history of the Fund, which represents a growth of 32%; and in guaranteed value we multiplied 2.3 times, which means that we grew more than 100%.
There is another relevant data there and that is that we are talking about reaching 506,000 companies that have accessed loans, which include 50,000 independent workers, with which we have contributed to preserve more than half a million jobs with this guaranteed funding structure of the fund, so that companies have working capital to maintain their operation and to maintain their payroll.
What other changes occurred amid the pandemic?
There is another important piece of information is that we reach new segments. Before March, we were specifically focused on MSMEs and from the pandemic period, two segments entered: independent, formal and informal workers, that is, they contribute to social security and do not contribute to social security, and also large companies, which was a segment that it was not served by the fund.
How was the behavior of these endorsements in the different regions of the country?
The Fund is present in 100% of the departments and in 99% of the municipalities and last year we reached practically all the municipalities in the territory. This behavior goes very hand in hand with the intensity of economic activity in the Gross Domestic Product (GDP). Almost a third of the guarantees have been delivered in Bogotá, with 32.5%; then there is Antioquia, with 17%; followed by Valle, with 10%; and Atlántico, with 5%. Santander and Antioquia were also very important regions, with 4.5% and 3.6%, respectively. The rest of the departments represent 26%, which means that 75% of the guarantees delivered by the Fund in 2020 are concentrated in the first six.
How was this behavior in the different sectors of the economy?
The only branch of economic activity to which we have not guaranteed credits is public administration, for obvious reasons, but for the rest, all in the private sector have the support of the National Guarantee Fund. Wholesale and retail trade, manufacturing industry and construction easily account for 60% of guarantees. In the first, 36% of the guarantees have been backed, in the second it was 15% and in the third it was 9%. But we have also supported highly affected sectors such as restaurants, hotels, tourist services and cultural services, where more than 4% have focused on this segment.
You were saying that 506,000 companies had benefited. How are they distributed?
95% were MSMEs, among those 75% are concentrated in micro and small companies. In independent workers we are around 3%, and 2% in large companies. This reflects that the most severe credit restriction faced was by the smallest companies, because they were the ones that most used guarantees from the fund.
What were the lines managed by the fund throughout 2020 and where was the greatest activity concentrated?
There are two key products: working capital and investment, which is a guarantee line that we design to be able to support credit applications from entrepreneurs who need resources to buy raw materials, to pay rents and public services. This line currently has a total quota of $ 9 trillion and loans that exceed $ 6 trillion have already been requested. The other that is very important is the payroll line, especially at the beginning of the pandemic, where around $ 2.4 trillion was placed in 2020.
Are there other lines that were implemented in the middle of the Unidos por Colombia program?
We have lines related to microfinance, which is specifically focused on micro-businesses and in some cases informal vendors, to which $ 1 trillion was allocated and close to $ 700 billion have already been consumed. There are also two other lines that are new products: the bond issue, which was assigned a quota of $ 1 trillion and we already have requests that exceed that value, so we will have to expand it. The other has to do with the guarantee of housing to support Colombian households and that they can fulfill the dream of having their own home, but also with an intention of economic reactivation, since to the extent that demand remains high against housing projects, there is also going to be a demand for everything that has to do with the construction sector.
Until when will these guarantees be maintained?
All these lines go until June 2021. Initially they were until September of last year, but due to the intensity with which the pandemic was experienced, we made the decision to extend them, with the endorsement of the Ministry of Finance and the Ministry of Commerce. For now we are making permanent evaluations to see if that period is sufficient, but until today we are going until June.
What are your projections for this new year?
This is going to be a hybrid year, because these exceptional aid will be available until June, but from July on we would be with traditional products, which are those with 50% guarantees. In terms of placement, we are going to have a drop in guaranteed loans, we are talking about $ 17.3 trillion for 2021, but in context when that figure is compared with the full period April 2020 and June 2021, we will have guaranteed loans in the order of $ 29 billion in the most critical part of the pandemic and the most critical part of the consolidation process, benefiting 600,000 companies, which will help preserve 1.8 million jobs.
In total, with the $ 17.3 trillion that we hope to guarantee in 2021, and taking into account that 2020 was a difficult year, we will have placed resources in the order of $ 37.1 trillion in guaranteed credits in the two years, which is a figure well relevant. In summary, between 2020 and 2021 $ 37.1 billion will be placed; of those, $ 29.6 billion will have been specifically mobilized in the pandemic and consolidation of the reactivation.
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