Government would end the business of 'drop by drop', filed bill

In recent hours, the Government filed a bill in Congress with which they seek to combat the famous 'drop by drop' lenders operating in the country. The document “which dictates rules related to access and financing for the construction of equity and other provisions”, aims to increase financial inclusion, give access to different financing mechanisms, modernize payment systems and update the capital market.

The Minister of Finance, José Manuel Restrepo, was responsible for explaining what this bill they presented consists of. “This is a project that will not only allow us to increase social welfare and equity in the country, but will also be key in the fight against informal and highly expensive schemes, such as 'drop by drop' or 'payday. ' This initiative will contribute to this end of universalizing access to legal, safe and low-cost financing schemes,” explained the official.

Considering that with the advance of vaccination against covid-19 the country entered a stage of economic reactivation, the Treasury portfolio noted that this project will be able to give greater dynamism to funding options, which in turn will help the country's economic boost, and they added that it will also contribute to the social welfare of citizens with the generation of employment and opportunities.

This initiative includes several of the ideas previously raised in the Capital Markets Bill that the Government had already submitted, but which it decided to withdraw in order to avoid its collapse. Now, with this new project, they return to some parts of that initiative that came out after a discussion of experts from the Capital Markets Mission.

This new proposal presented by the Government official is intended to encourage loans to the highly informal population, guaranteeing access to credit to small and medium-sized agricultural producers. In addition, they will also encourage funding for micro, small and medium entrepreneurs.

In the same way, they aim to boost access to the capital market as a financing alternative so that citizens can get their own resources, for productive projects, which includes credit support from the National Guarantee Fund up to 90%.

The official head of the Treasury portfolio also added that the filed bill “seeks to contribute to the creation of a flexible legal framework, in line with international standards, so that more citizens can access the capital market. Better conditions will be created to generate more competition, by allowing the entry of new entities that specialize in activities, with regulatory requirements commensurate with their business model.”

Restrepo also pointed out that the project also aims to promote universal, efficient and secure access to the payment system, which will allow more and more people to try to make their payments electronically, from the comfort of their home and avoid queues and formalities. All these payments are intended to ensure that they are carried out in an agile and secure manner, while promoting electronic commerce.

He also stressed that the bill is the opportunity to create better conditions to generate more competition, by allowing the entry of new entities that specialize in activities, all with regulatory requirements commensurate with their business model.

“The project was filed with a message of urgency and it is expected that in the coming weeks it will begin its discussion in the joint economic commissions”, concluded the finance minister after filing the project.

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