Equador microlenders feel pressure of interest rate reduction
Microlenders in Ecuador may be pushed to sell their portfolios to larger institutions due to tightening interest rate caps, website Business News Americas (BNA) has reported. Executive Director of Red Financiera Rural (RFR), Javier Vaca, told the Latin American news site that the interest rate cap for microlenders has been contracting since the government’s banking reform in 2007, which allowed Ecuador’s central bank (BCE) to set the maximum interest rate for banking institutions. Interest rates were further reduced by BCE last week, from 33.9 per cent to 30.5 per cent for microlenders and from 33.3 per cent to 27.5 per cent for others.
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