The use of predictive models based on artificial intelligence processes and automated collections are some of the changes that companies are already applying in this new reality to reduce operating, management and risk costs.
The spread of covid-19 changed the rules in almost all markets and business models, a situation that has affected the collections departments of companies, whose work teams are currently facing complex challenges.
The Congress of Honduras is analyzing lowering credit card interest rates from 60% to 30%, in a rescue plan that includes pension funds buying that debt from the banks.
The rescue plan on overdue credit cards, which uses resources from pension funds, could lead to bankruptcy for these entities, Honduran economists warn.
An advisor to the National Congress, Eval Diaz, told prensa.hn that the debt amounts to about $750 million and through a legislative decision the portfolio would be bought in addition to lowering interest rates on credit cards from 60% to 30%.
Defaulters of the Honduran Tax system have been blocked from gaining access to the National Tax Registry (RTN in Spanish) and the Automated System for Customs Revenue in Honduras (SARAH in Spanish).
An article in Laribuna.hn reports that "The Executive of the Revenue Department (DEI in Spanish) this week launched the blocking of the National Tax Registry (RTN) to a hundred small, medium and large taxpayers who are tax defaulters, so that they can not carry out any commercial operations whatsoever. "
The partnership between the Executive Directorate of Revenue and the company Equifax, will mean that tax defaulters will be included in the credit bureau’s information.
This agreement will allow access by the financial system (private banks, finance companies, and cooperatives), to taxpayer’s debt information held with the Treasury.
"The measure of including tax debtors the credit bureau will help strengthen the credit analysis carried out by financial entities," said a source from the Honduran Association of Banking Institutions (AHIBA) ", according to an article in Elheraldo.hn
Delinquency is over 10%, the client portfolio is stagnant, and credits have grown just 5%.
When dealing with this scenario, Aníbal Montoya, vice president of the Honduran Micro Financing Network, recommended companies to be more effective and efficient when granting credit lines.
"Companies affiliated to Redmicroh offer micro financing services for commerce, crafts, agriculture, housing, consumption, among others", reported Honduran newspaper La Prensa.
The crisis has rapidly increased the levels of delinquencies, and getting paid on time and in form may be vital for an SME.
Maintaining liquidity has become a golden rule for businesses and one way to keep cash on hand is to simply stop paying suppliers. Of course, those who suffer most are companies that do not have bargaining power due to their size to recover unpaid debts and to devote resources to an adequate analysis of the risks of extending credit to each buyer.
The management of micro-financing in the context of the global financial and economic crisis implies challenges, but also opportunities.
With the title "The World Crisis and Micro-Finance," the Academy of Central America organized a discussion for legislative advisors and journalists, where a professor of Ohio State University, Claudio González Vega, analyzed the role of the micro-finance in the current situation.
It is necessary to prevent the governmental assistance to less solvent debtors from destroying the payment culture.
The micro-finance sector globally has a very low level of default, a product of a culture that is important to preserve by restructuring contracts in risk instead of granting direct financial assistance to debtors.
The delinquency rate for small companies is at 6% and has accumulated to $5 million already, the president of RedMicro, Anibal Montoya, indicated.
Elheraldo.com reports that "the network includes 24 organizations which deals with 190,000 small and medium businesses with a portfolio of $80 million.
Since yesterday the National Federation of Honduran Palm Farmers and the National Agriculture Development Bank are negotiating an agreement that will keep them from going into default.
According to elheraldo.hn, "the situation is starting to suffocate some 4,500 to 5,000 independent producers along the Caribbean coast.
Mario Ramon Lopez, manager of Banadesa, said that they are looking for a way to be able to make gradual .payments