Mortgage credit, Argentine development engine

Undoubtedly, Argentines have ahead of the challenge of developing our country, of achieving better living conditions and having a developed and thriving nation. Argentine exit and overcoming is with investment and is with savings.

Now: many will ask: where will the money come from or how will that wealth be generated that will allow us to grow?

And here the response of the million: Argentine banks will be the protagonists and the locomotive of this change. They will do it because looking at the local market and lending Argentines will be a convenient and profitable business and, analyzing alternatives, surely the best business. They assume a new role, becoming a key piece of Argentine development.

Due to traumatic situations of our history, unfortunately, financial entities had to act as a financial agent attached to the financing needs of the Treasury, the State and the Government on duty. We are going to the concrete: In recent decades, the Central Bank of the Argentine Republic, instead of being the Dolunts Conversion Fund that enter the country for the sales of Argentine exporters, became the Treasury Nexo for what was known as the Leliqs Festival and another kind of short -term obligations issued by the State to achieve financing.

Let’s say it in simple words. Because the State spent much more than it raised, when the end of the month arrived, and the payment of wages had to be faced, what was done was to issue a very short term debt: 30, 45 and 60 days, with annual rates that could reach 200% per year. In that way, the state got into an increasingly deep well: internal indebtedness was like a snowball, increasingly large and unstoppable.

Fortunately, in recent times the State is spending less than what it collects, therefore that need to get fresh money through the issuance of titles and short -term debt, which was known as the Leliqs festival, has disappeared. The State is no longer a wholesale client of the banks or the only client who actually brought together all the operations and all the attention of these.

Expired and finished the need to be a financial instrument of the needs of the State, local banks, in the alternative of placing their surpluses in international places, which have high volatility, much risk and, hopefully, a low profit rate, or lend to the Argentines, which would bring them a much higher return rate, undoubtedly, they have opted for this last option; The fall of interest rates, the expansion of mortgage loans and the extension and multiplication of personal loans is being seen day by day.

The rates have fallen from more than 100% to less than 50, and in no more than one semester those rates could be in the order of 25% per year, and therefore show a horizon of better possibilities of access to credit. Recall that important engines of the development of modern Europe and the United States of America have been the loan, savings and investment, promoting mortgage credit at a level at which banks grant loans not only for the acquisition of a real estate, but also for the purchase of furniture, and even money to pay the move and purchase of a vehicle. That is, the banks fulfill their “lend money” and in that role is the function of promoting consumption and favoring the development of the country. In addition, with each weight that a particular taking of a bank, spends and invests, the logical and mandatory payment of taxes that strengthens public coffers is reached.

In this way the equation is that of a virtuous circle of investment, savings, capitalization and taxation.

Nothing better for those who seek to overcome, than to know what their situation is and be clear where you want to go. Argentines can and deserve much more.

CEO Sabatini Real Estate and Real State Business