In Uruguay, Debtor men under 35 years of age are the ones who have the greatest problems facing credits within the universe of 690,000 people who are over-indebted in the country, according to the report of the Administrative Technical Commission (CTA) of the Association of Bank Employees of Uruguay (AEBU).
The situation of indebtedness of natural persons It is a pressing problem in the country, which mainly affects families —a third of the sector (representing 97% of operations) has problematic categories— and, mainly, men under 35 years of age.
In general, the document records that, in any age group, lMen are the ones who have the biggest problems. to meet their loan payments and, therefore, have lower scores. However the segment under 35 years is the one with the highest number of “problem” debtors, with a total of 44%.
It does not seem to be a coincidence: Uruguay is the country with the highest youth unemployment in Latin America. According to a report from Development Studies Center (CED), 6 out of 10 unemployed people are under 30 years of age in the same country that has one of the lowest unemployment rates in the region, accounting for the problem concentrated in an age range. Therefore, the sector that has the most irrecoverable debts is also the one that has its job stability most compromised.
Over-indebtedness in Uruguay, a big problem
Nearly two million people, the 71% of the population over 18 years of age in Uruguay, it appears as a borrower for the Central Bank of Uruguay (BCU); that is, the vast majority of the population had to resort to formal financing for various reasons. Of this total, currently, are 690,000 people who are over-indebted36% of people who have a loan in the Uruguayan financial system within what is considered the family sector, according to the AEBU CTA report, with data from last February.
This large percentage of people are not in good “financial health”Therefore, they also have great difficulties in accessing quality formal financing. A situation that leads to resorting to alternatives with worse conditions, which only increase people’s level of indebtedness, instead of solving it.
Within this general range, they are the youngest and the men who have the greatest problems to comply with the payments stipulated in a loan, although it is the women who have the greatest difficulties when accessing a loan for the first time.
Of the 690,000 over-indebted people in Uruguay, 29% are under 36 years of age, 58% are between 36 and 70, and 12% are over 70.
Despite the magnitude of the figures, the AEBU CTA acknowledges that publicly available information is extremely scarce and it does not allow a very clear dimensioning of the real dimension of the phenomenon. Therefore, there are various situations of indebtedness that are not registered, either because they are not regulated by the BCU or because they are carried out in informal settings.
Cabildo Abierto, in search of a solution
It is this problem that Town meeting with his debt restructuring project for individuals, and it is for those 690,000 people who he wants to legislate before what they consider to be a “pressure cooker”blow up in the face of the government.
As the AEBU CTA report points out, the lobbying project seeks to solve situations of over-indebtedness and exclusion from the formal financial system through mechanisms in which debts are restructured through administrative or judicial channels, with a refinancing system similar to the one used by companies when submitting to a concordat.
The creation of this judicial process implies that the debtor could appear before the Consumer Defense Unit of the Ministry of Economy and Finance (MEF) and initiate the restructuring of all its debts and, failing that, go to court.
The most recent version of the project also includes the concept of “just debt” through reasonable interest rates for debtors, with the aim of enabling them to pay off the debt. Likewise, there is an entire chapter dedicated to debts with the State.
Source: Ambito
