In line with its fiscal adjustment strategy, the Government made official the elimination of the “Microcredit Promotion Program for the Development of the Social Economy”. According to decree 1094/2024, published in the Official Gazette, both the program and the National Commission that managed it were dissolved, together with the National Microcredit Promotion Fund.
The Government alleged that, “since 2006, files have been paid for a total of $3,341,517,790, destined for the capitalization of Microcredit Institutions.” “However, as of September 2024 An active portfolio of $751,240,653 is recorded″, they clarified and explained that “andThe current portfolio amount reflects a loss of the total funds delivered historically”.
Consequently, they considered that this situation evidences “poor administration of the Program by the National Commissionwhich has caused the squandering of public resources that should have been allocated exclusively to fulfilling the purposes of the Microcredit Program.”
“It has not achieved its objectives, given that a formal registry of microcredit institutions has not been implemented“, nor have sanctions been applied for non-compliance with the obligations that said regulations impose, which reflects a lack of effective control and supervision in the execution of the Program,” they evaluated.
Among other irregularities detected, they highlighted that “since the creation of the Microcredit Program No formal evaluations or impact studies have been carried out to measure the effectiveness of the microcredit policy on social economy entrepreneurs.”.
Regarding the commission, the Executive indicated that “is oversized in relation to the current needs of the Programwith a structure and functions that exceed the operational and management requirements necessary to meet its objectives.”
“The contribution to the development of the Microcredit Program by the aforementioned National Commission, in terms of scope and impact, has not been significant or proportional to the resources available for its operation, which denotes a economic inefficiency that justifies its dissolution”, they mentioned and maintained: “The granting of financing constitutes an activity that must be carried out efficiently and competitively by the private or public sector, which has the resources and capacity to offer credit products under the supervision of the Central Bank of the Argentine Republic (BCRA)”.
Within the framework of the reduction of the presence of the national State, they also mentioned that “currently, various financial institutions, both public and private, as well as non-profit organizations, have active microcredit lines aimed at small entrepreneurs, which “which would indicate the capacity of the financial system to satisfy this demand.”
The Government stated that to make this decision “it was taken into account that the country was going through a situation of unprecedented severity, generating deep imbalances that still negatively impact the entire population, especially socially and economically, within the framework.” “of a crisis so severe that it puts at risk the very subsistence of the established social, legal and political organization, affecting its normal development in pursuit of the common good.”
Thus, they highlighted that this situation “takes place in the midst of a situation of enormous social gravity as a consequence of an economy that has not grown since 2011, with very high rates of poverty and indigence with a special impact on children and deterioration of real wages, social aid and pension benefits.”
Source: Ambito
