The “cheap credit” initiative not only offers an alternative to small merchants, but also represents a direct attack on the mafias.
More than a loan, an extortion. Credits called “drop by drop” or “pay daily” are a modality that exists in Colombia for people who cannot access the bank for legal financing, for this reason, President Gustavo Petro has declared war on them.
The trap of these loans is that debtors end up paying interest ranging from to the 30 % monthly , which is typified as a crime in the Penal Code. Failure to pay can also cost them their lives.
Last week, the president delved into his proposal to eliminate the ‘drop by drop’ from the popular economy to replace it “with a cooperative credit system”, which can even be digital, and that it would operate publicly. In his words, it is “a development bank” for historically excluded sectors.
Is this proposal viable?
This is not the first time that Petro has made this statement. A few days after being elected, the president proposed three tasks to the banking system that would allow him to wage an all-out war against usurious lenders: democratize credits ; give more financing to the agricultural and industrial sectors; and advance in a “more decarbonized economy”.
But on the first two points there is the hard nut to crack to combat the practice of ‘drop by drop’, which has been implemented for decades by mafias, since the difficult access to banking and formal financing in Colombia is the main incentive for small merchants to resort to “borrowers”.
From the banking sector they assured that they were willing to “work together” with the Government to open these possibilities, even from the private sector, although they insist that there is still a long way to go to close the gaps.