Warn that informal debt is rising due to credit restrictions
Due to the crisis linked to Covid-19, and lately due to restrictions on access to credit in banks, informal debt is expanding in Chile in a worrying way and Biobío is no exception.
On the one hand, the restriction on access to credit due to the health crisis, since financial institutions have placed greater obstacles to granting money, triggering a smaller number of people to access aid. So, those who are left out opt for non-formal financing channels, explained the lawyer and partner of Staff Chile, Raimundo Bravo.
“On the other hand, there is the high number of immigrants who, lacking a business background, find it more difficult to access the formal credit industry. And specifically, due to their condition, it is essential for them to have liquidity, especially upon arrival”.
Another third factor, Bravo said, is the delinquency levels, a condition that appears in commercial reports, blocking the way for traditional banking.
“Lastly, and what in my opinion is the most relevant, is the lack of financial education, the mismanagement of household finances and the ignorance of the negative consequences of accessing this type of credit.”
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Unfortunately, as it is an informal channel that is not supervised or supervised by the CMF, it is much more difficult to protect oneself from abuses and actions by informal creditors in relation to the credit granted. “At the end of the day there is no control and, therefore, Therefore, there are no tools that allow the authority to take charge of this type of credit operations”.
Dangers
According to a study by Chiledeudas.cl, today 28% of households in the Biobío region have some type of financial commitment, which encompasses a universe of more than 1,200 people in the area by remote means.
40% of the group with informal debt corresponds to the population between 30 and 45 years of age; 29% to the elderly over 60 years of age; 21% to young people from 18 to 29 years old; and the remaining 10% to people between 45 and 59 years of age.
Later, 33% of these people agreed to informal debt due to the pandemic crisis and the deep restrictions on access to credit; 32% against emergencies that arose before the Covid-19 health emergency; 25% due to the rapidity of liquidity that the alternative gave them; and 10%, since the amount they needed was not obtained in the formal market.
How do they access the money? 43% through informal lenders, mainly foreigners, with direct delivery of the required amount; 32% through different electronic operations; 15% requested financial resources from relatives, friends or acquaintances; 10% in pawnshops.
The executive director of Chiledeudas.cl, Guillermo Figueroa, warned that one of the mechanisms used by these lenders that operate outside the law has to do with asking the holder of a card to simulate an international purchase, where the financier has a payment server or processor connected abroad, generally in the United States and Luxembourg. The difference with a real purchase is that the person does not receive a product, but local pesos in his account. "The problem is that the monthly commission is up to 25% of the amount to be delivered, being a very high value to pay for the irregular transaction, which falls into the scope of usury and eventual fraud."