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Peru's government not shutting Agrobanco down, plans 450M soles injection

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Peru's government not shutting Agrobanco down, plans 450M soles injection

Peru's government denied speculations that it plans to close troubled development bank Banco Agropecuario, or Agrobanco, and presented plans to restructure the bank and establish a new credit strategy, according to a report by Gestión.

Finance Minister Claudia Cooper reportedly said the credit policy of the bank had to be redefined so that "funds really reach farmers," and that the national government would recapitalize Agrobanco with 450.0 million Peruvian soles in 2018. The next steps will include bringing down the high levels of delinquency, especially for loan collection from medium and large companies.

Speaking at a meeting with a congressional agricultural committee, Cooper acknowledged the bank amassed two years of bad debt due to a bad credit policy which neglected farmers, according to the publication.

Meanwhile, El Comercio reported that Agrobanco on Feb. 7 will reveal to Congress a list of 30 companies within the agricultural export sector whose debts account for 49% of the bank's delinquent portfolio, which in total reportedly amounts to 950 million soles.

The state-run bank reportedly revealed that the main defaulters, companies Cultivos Ecológicos and Agricola Yaurilla, owed around 100 million soles each.

In August 2017, Agrobanco said it was unable to grant new loans due to debts from large clients.

As of Feb. 6, US$1 was equivalent to 3.26 Peruvian soles.