"These are loans that can now be taken out for up to $180 million for 180 days. The province will set an initial quota of $1 billion, which will allow for almost 8,100 transactions, all aimed at working capital, which I believe is the greatest demand in these times," said the minister, adding that, in terms of uptake, "the comments are positive, there will be demand, we will see if the quota is sufficient and how we can feed it according to needs".
The initiative is currently in the order-taking stage, where each company or production unit "will go to the banks with what it wants to exchange or trade on the stock market, will receive approval, and that will be at the market rate at that time, minus ten points, which is the bonus offered by the province of Santa Fe."
Boost for the SME sector
Olivares stressed that this is not just a matter of support, but also means "a boost, because we understand that SME financing is a tool, almost a vital input."
"What we are doing is opening a big door so that SMEs can now, through entities linked to the capital market, offer a cheque or promissory note, negotiate that financing with an interest rate subsidised by this subsidy, to make it competitive and accessible," added the minister.
Finally, the Minister of Economy stated: "With these ten points that we are going to lower the rate, we are going to allow those who take out this financing to have a financial cost that is equal to or below inflation."
"The provincial government says you are not alone"
The president of the Santa Fe Stock Exchange emphasised that this is a "concrete tool, with a very significant special rate bonus" and explained that "a rate reduction will allow SMEs, in particular, to breathe easier."
For his part, the head of the Argentine Stock Exchange said: "The most important thing about all this is that all sectors with financing possibilities are working to ensure that SMEs have the necessary support. With this rate bonus, the provincial government is saying you are not alone, let's go together, we are with you, and I think that is significant."
Further details
It should be noted that this agreement provides for a provincial contribution of $1 billion to subsidise interest rates on stock market transactions. With this mechanism, MSMEs will be able to discount cheques and other commercial documents on the stock market, gaining access to immediate financing with more favourable conditions. The objective is to reduce financial costs, stimulate investment, and strengthen the productive fabric of Santa Fe.
The scheme provides for interest rate subsidies to facilitate MSME access to capital market instruments. The applicable rate will be determined by the market for each transaction, on which the Province may subsidise up to ten percentage points per annum, ensuring that the final rate is not lower than the floor of 15%.
