QCOSTARICA — In May 2022, more than two years ago and just after taking office, PUSC legislator Daniela Rojas presented a bill with the intention of implementing Microcréditos (small loans) that would mitigate the effects of the usury law (ley de usura in Spanish).
The usury law, capping interest rates, left many people out of formal banking and forced them to apply for loans in the informal sector, including the so-called “gota a gota” (loansharking).
The progress of the proposal has been slow. This week, first-day motions would begin, presented mostly by the Frente Amplio, who was opposed to the initiative.
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“They oppose it because they say it is a way to eliminate the usury law, but we are not touching it,” said Rojas.
The proposal is being discussed in the legislative Comisión de la Mujer and was not called in extraordinary sessions, so it was “stored” for three months. Now the discussion will be reactivated.
The PUSC legislator’s bill seeks to generate microcredits of amounts less than ¢693,300, or that do not exceed a maximum amount of 1.5 times the base salary of a Judicial Branch’s clerk.
The original bill proposes a more specific division for Microcréditos according to the different categories:
- Women
- Personal
- Persons without a credit history
- Productive sector
The initiative establishes the formula to calculate the maximum limit for each of these groups, according to the risk of non-payment that they represent for suppliers, but in such a way that they can be subject to financing.
Substitute text
According to Rojas, they are working on a substitute text for the initiative that would be presented on the second day of motions.
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“The substitute text is being born from some doubts of legislators to correct the formula that had been made with the usury law,” indicated the legislator.
What is sought, mainly, is for the Central Bank of Costa Rica (BCCR) to technically define the interest rate for microcréditos.
At this moment, she assures, they are coordinating the issue to have it ready soon, knowing that the process is still slow.
For the legislator, this change is being made “without eliminating the types of microcréditos.”
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“What we are looking for is that there is a promotion of microcréditos as a possibility of access to those most vulnerable sectors,” added Rojas.
The effects of the Usury Law
In 2020, the Usury Law established artificial limits on the interest rates that banks and financial institutions can charge.
When these limits were established, financial companies, in response, assumed fewer risks and, therefore, left out of the possibility of credit a good part of the most vulnerable population in the country: those who do not have guarantees, with a tainted credit, without a credit history, among others.
The same occurs with micro-enterprises, which do not have the same characteristics of a large and formal company that can request a loan from the banking system.
Micro-enterprises are usually in the informal sector, do not have financial statements, are not affiliated with business chambers, and are not even on the radar of the tax departments.
“In the imagination of many, there is talk of millions, but for a woman who started making cakes or bread during the pandemic, because she was laid off or wants to start with that, and her capital is a mixer and an oven, that is what she needs,” Rojas had said months ago, when explaining the proposal.
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