The National Financiera de Desarrollo Agropecuario, Rural, Forestal y Pesquero (FND), which in recent months stopped granting credit, faces high levels of non-performing loans, said Gabriel Yorio, Undersecretary of Finance and Public Credit (SHCP).
Within the framework of the 86th Banking Convention, Yorio González spoke with El Economista and explained that this problem of the overdue portfolio in the institution is something that has been dragging on since past administrations, for which the FND made the decision to pause the granting of credits to start solving this problem.
“This is a problem that is generating a significant burden for the FND. We are entering this process of separating what is the good bank from the bad bank, this is a procedure, let’s say, traditional in banks to see which is the good portfolio that can be recovered, which is the bad portfolio, as well as what treatment we can give it to him,” he explained in an interview.
In this sense, he added that it must be detected which is the “bad portfolio” and what treatment can be given to those credits that are hardly being collected. Likewise, it seeks to optimize the assets of the development bank, for which some debt prepayments are being made.
According to the latest available data from the FND, which correspond to June of last year, the institution’s delinquency rate was 19.2%, notably higher than the rate of 13.6% that occurred in the same period of the previous year.
When expressly asked if the institution will disappear, Yorio commented: “we are analyzing it from the point of view of its assets and liabilities. It is important that any strategy be carried out in an integrated way with the other development banks, and that is the advantage we have of having sectorized banks that, although it seems that they are focused on a single activity, we also have some overlap with other entities”.
In this sense, he indicated that in the event that the FND had to retract its credit portfolio, there could be other institutions within the development bank that could offer these services, such as FIRA or the new Financiera del Bienestar.
no credits
Since last December 15, the FND reported that all granting of financing was paused and, in turn, will give priority to advance payments of credits that are held with international organizations, according to a document sent to the regional coordinators in charge of the Regional Coordinations.
The document specified that new credits may not be granted or the dispersion of loan resources that have previously been contracted continue, except in “those pre-existing cases of a particular nature in which the intermediaries or receiving companies are in a current portfolio and Justifies that the lack of credit resources may result in the intermediary or the company in question not being able to maintain a current portfolio”.
The FND’s internal statement in December has caused uncertainty among financial intermediaries and farmers, who have expressed that this leaves much of the work that the primary sector does and for which these credits are necessary on hold.
The Financiera’s agreement stipulates that all the resources obtained from any source of liquidity must be concentrated in the Treasury of the institution, in order to be used solely and exclusively for the advance payment of credit lines with international organizations, until finished doing it.
Currently, the FND has loans with institutions such as the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB).
The credit pause has also generated concern within the sector regarding the possibility that this means the disappearance of the FND, for which no clear news has been given or what would happen to the credits if this were to happen.
In past years, the FND was able to place up to 70,000 million pesos annually. The most recent data, as of last November, indicate a placement of just over 30,000 million pesos.
Although the credits are granted mainly to small producers, the lack of financing would impact the production of certain crops and, in turn, if there is no supply in the Mexican market, products from other countries must be imported. The pause in credits not only affects producers, but also financial intermediaries.
