Kaza Cusco has become the first municipal savings bank to meet all the requirements demanded by the Superintendence of Banking and Insurance and AFP (SBS), offering credit cards focused on micro and small entrepreneurs across the country. At the end of December, the entity anticipates holding 5,000 credit cards. But it won’t be the only one.
The Peruvian Federation of Municipal Savings and Credit Banks (Fepcmac) confirmed to La Repubblica that three more entities are preparing to launch their plastic product and that there will be at least two this year. One of them will be Caza Huancayo, which will launch its card before December, and they expect to reach 5,000 customers, said Jorge Solis, president of Fepcmac.
For its part, Caja Arequipa announced via this that it will launch its card in the first quarter of next year and expects to reach 100,000 customers in the first six months.
“The authorization of Caja Cusco to issue credit cards is a historic milestone as this product is a longstanding aspiration. As a federation we are managing this possibility many years ago, unfortunately this feature notwithstanding the fact It was not given that savings banks are institutions with more than 40 years of experience,” Solis said.
looking for more access
In the case of Caja Cusco, the strategy is to gain the loyalty of its existing customers, as they have identified that 78% of them are customers of other entities due to a lack of products such as credit cards.
“This card has a unique feature, it is meant for business customers but will have a consumption option. The idea is to check and monitor what is the perception of the customers about the card. We have 400,000 customers, about 300,000 are from micro and small businesses, if I give only 10%, we can easily manage to have 30,000 cards”, explained Walter Rojas, Central Business Manager at Caja Cusco.
For his part, Caja Arequipa’s central business manager Wilbur Dongo said by the way that his focus would be on a wider audience. “We congratulate Caza Cusco for obtaining this authorization; however, SBS is conditioning it for cards for the mype sector and, as is known, these cards are mostly offered for consumption”.
In that sense, Dongo considered that Caja Arequipa refers to having a comprehensive credit card so that the holder can access consumption.
“We still need to submit some formalities. We anticipate launching our card in the market in the first quarter of 2023, we anticipate reaching 100,000 customers in the first six months”, he commented.
Finally, SBS superintendent Sokoro Hessen recalled that from April 2021 the entity approved a simplified procedure for authorization of microfinance entities to issue credit cards.
Credit Line up to S/50,000 for Entrepreneurs
Entrepreneurs with micro and small businesses will be able to reach S/1,000 to S/50,000 for procurement, working capital and cash availability.
Credit cards are now available to its customers at Caza Cusco. By October, it will be enabled for the rest of the interested, and from January unbanked citizens will be able to access it, provided they have MIPS.
The interest rate for purchase (consumption) is 29%. This is almost a quarter of the fee charged by banks, which is 121.4%, according to SBS data. Meanwhile, the rate for working capital will be 27%; and for cash settlement, 59%.
Jorge Solis Espinoza, President of FAPMACU
“There will be more competition in the market for the benefit of the customers; When oligopolies are present, interest rates are high and even prohibitive; Today they will definitely go down a lot.”