Bank Loans Facilitated to Self-employed Workers in Cuba

Since December 2011 banks in Cuba offer the option of loans to self-employed persons to invest in working capital (payment of raw materials, supplies, salaries) and business-related funds (construction of places, and buying means for works) .

However, supply has failed, and up to date, the Credit and Commercial Bank (BANDEC) in the Cuban central province of Sancti Spiritus has only granted 30 loans to this segment. Executives and specialists of the institution believe there is a lack of knowledge of this possibility, which has been gradually easing .

To answer some doubts, Escambray comes back on the subject with Clara Valdes and Maria Victoria Martinez, commercial deputy director and head of the Banking Division of BANDEC, respectively.

What are the requirements needed by non-state workers to access these benefits?

The applicant must submit proof of the taxpayer registration, the identification card, the accreditation as self-employed, the evidence that he/she has a current bank account if the income exceeds the 50 000 Cuban pesos, as well as other official documents we may consider for the analysis of risks and avoiding overdue debts.

What other steps are needed in order to apply and how long does it take to deliver the credit?

We make risk analysis and submit them to the approval of the Credit Committee. We have up to 30 days, although in practice it takes less. Applications must always be performed at the branch where these workers maintain their legal domicile.

How much money can be asked for with these loans?

There is no limit, it depends on the capacity to pay self-employed that is calculated from the income forecasts coming from sales of production or provision of services .

For the ammounts approval we have different levels: in our branch until 10 000 pesos for investments and 5000 for working capital, at the Provincial Department, up to 20 000 for investment, and 10 000 for working capital; from those figures on, the acceptance is decided at the central office.

What time the self-employed workers have to repay the credit?

Regardless of the amount, up to a year and a half to pay the loans debt for working capital, and up to five years for investment .

What are the interest rates?

It depends on the delay to pay it, ranging from 2.5 to 9 percent.

Do all applicants are required to submit guarantees?

Applicants for loans up to 10 000 pesos only must give the bank a part of the present and future incomes of their business, depending on the agreements we make, which is one of the flexibilities that have been taken. From10 000 to 25 000 pesos, along with the previous payment, they must submit a supplementary guarantee to cover half the amount requested .

What kind of warranty?

Since April this year other warranty options are accepted. In addition to the joint guarantor and saving account, real and personal properties such as jewelry, automotive equipment, summer or vacation houses mortgages, among others. Not all of these items need to be moved to the bank. Between 25 000 and 50 000 pesos, the guarantee must cover the 70 percent of the requested amount. If the request exceeds that figure, it has to cover the 100 percent.

For the self-employed who rent places of interest to the State or any company, these can become guarantors for their requests. It is important to explain that the Bank will not finance loans in foreign currency, only in domestic currency.

Any other new flexibility for granting these credits?

Sometime ago, if the business was not established, the Bank did not finance it, however, it currently benefits the beginner with a minimum interest rate, according to the agreed time for the return of the money. Any questions regarding these issues can be clarified in our branches .