The FGA Guarantee Fund is an institutional guarantor for Colombians, which supported credit to 1.8 million people in 2022, in $6.7 trillion in new credits. David Bocanumet, president of the entity spoke with Portafolio on the paper that the fund includes in the financial institution and that by 2023 a growth of 28% was projected, reaching more than $8.6 trillion in supported loans.
What is the FGA Guarantee Fund?
They confuse us with the National Guarantee Fund (FNG). They are two independent entities. The FNG belongs to the Government and our shareholder and facilitates micro, small and medium-sized companies to obtain access to credit.
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The Guarantee Fund is for natural persons. We work in agreements with institutions that lend money, supervised by the Financial Superintendency and others that are not supervised that give credit such as fintech, compensation funds, neobanks and commercial companies that lend, for example, for cell phones or household appliances.
We facilitate access to formal credit and with us credit risk is reduced and the probability of approval is higher. Everything is automatic, if the entity approves the credit.
Are they insurance?
We are not sure. This is a bail. When the collection is made and the client does not pay, we pay the entity and the person remains indebted to us, and there we enter to seek payment in a friendly collection.
And do they pay?
Colombians are well paid. Most defaults occur due to specific effects, but we look for an amicable solution and if we do not achieve it, we sell the credits to private entities or the Central de Inversiones.
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In consumer loans, we have guaranteed $30 billion to 5 million Colombians. In 2022 we guarantee $6.7 trillion to 2 million Colombians. This year we expect to grow 25%, that is, $8.7 trillion.
How are they going to grow if rates are high?
What the environment of high rates has done is establish credit, but we have closed new guarantee agreements with Daviplata, Banco Santander, Tuya, and that means that we will continue to grow this year.
Is it good to borrow right now?
This is a moment of prudence due to the environment of high interest rates. The recommendation is caution when applying for credit, since the payment capacity of households has also been affected by inflation. And it is that both from the offer, since the entities are demanding to approve, and from the demand, it is necessary to be prudent with the taking of credits and quotas.
After a part of 2020, all of 2021 and 2022 of low rates, when did everything start to change?
After the pandemic, and when the economy opened, the increase in consumer credit returned, which was favored by low rates, but on October 31, 2022, that credit expansion ended.
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We hope that by the end of the year rates will begin to drop, but today is not the time to buy with a 36-month credit card, or get into debt for issues that can be deferred. The educational enrollment of the children has to be done, but there is no need to borrow for a car or motorcycle now.