Peru’s new President Pedro Pablo Kuczynski hopes to use economic background to bring a “credit revolution” to his country.
CCTV America’s Dan Collyns reports.
Peru's President hopes to initiate credit revolutionPeru’s new President Pedro Pablo Kuczynski hopes to use economic background to bring a “credit revolution” to his country. CCTV America’s Dan Collyns reports.
Kuczynski,is former World Bank economist and an investment banker. Now, he wants Peruvians to benefit from the banking sector.
“I think Peru’s going to have a credit revolution. Revolution is a big word but credit is a small percentage of the economy – 35 percent. In the U.S., it’s 120 percent , in Chile, next door, 80 percent so if we can go from 35 to 60 in the next five years that would make a huge change to the life of these employers and employees,” President Kuczynski said.
Formal loans granted by banks and building societies reach just a third of small businesses in Peru.
For a small family business, access to formal credit could mean the difference between success and failure, and for the economy as a whole a credit revolution might be just what it needs to boost investment.
Yet, some small business owners complain being formal doesn’t benefit them.
“But the tax office always goes after the small businesses as if we were criminals, they should be more flexible. What about the big businesses? Do they pay their tax like we do?” said Consuelo, one shop owner.
While access to microfinance loans has improved, in 2014 Global Findex said only 29 percent of Peruvian adults had an account with a formal financial institution.
The International Monetary Fund predicts Peru will lead growth in the region ending this year with 3.7 percent while expanding to 4.1 percent in 2017.