Faced with the proposal of Congress After establishing caps on interest rates, several specialists agree that this measure could not be applied because it could have other effects such as financial exclusion. However, they pointed out that competition in the financial system should be encouraged, since only then will the market itself push for a reduction in rates.
The lack of competition in the local financial market would be the root of the problem, in a country where the main banks concentrate close to 90% of the sector.
The president of Caja Huancayo, Jorge Solís, urged that SBS makes it easier for microfinance institutions to grant credit cards, since currently 84% of this massive product is concentrated in commercial banks.
Solís pointed out that, according to projections of the savings banks, they would offer this product with rates between 30% and 35%, while commercial banks handle rates of up to 130% (see infographic).
The former head of the SBS Juan José Marthans supported this request and assured that this will boost competition “on an equal footing” between microfinance institutions and large banks.
Marthans explained that microfinance institutions are not allowed to offer credit cards for a matter of “prudence” which is taken into account in the field of supervision of banking entities. However, he asserted that this sector already has enough capacity to manage this type of cards.
“I believe that this prudence is no longer a kind of restriction and the best microfinance institutions, depending on their quality of performance, should be progressively allowed to work with credit cards. Today there is no reason why there are limitations to the microfinance front and it is not given the ability to manage it, ”emphasized the also director of Economics of the PAD of the University of Piura.
It should be noted that municipal savings banks have a 5.34% market share and are home to almost 8 million users.
Previous experience
The former superintendent of the SBS recalled that in 2003 the same ideas arose to restrict the expansion of municipal savings banks – at that time from their entry into the Lima market. “There was no reason in the market to prohibit that and my administration allowed the best municipal savings banks to enter Lima progressively. Nowadays, Lima residents can have a different alternative to banking to make their deposits more profitable and get credit ”.
Such is the case of the CTS, since the microfinance institutions offer profitability of up to 7%, while the banks only 1%.
Other SBS Tasks to Boost Competition
Enrique Díaz, president of the consulting firm MC&F, pointed out that the SBS should regulate fintech companies to boost their entry into the market, in order to multiply the offer.
For his part, Juan José Marthans emphasized the importance of the SBS massively disseminating the rates charged by each bank, in order for the user to be able to discern which entity is best for them.
He added that, within the framework of the Pacific Alliance, the largest banks in Chile, Mexico and Colombia could be allowed to enter Peru in order to generate competition and quality of service. That with the change that banks concentrated in the country offer their products in those countries.
Interest rates in the financial system.
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