Intermediaries and producers, in uncertainty due to the situation in FND

The pause in the granting of credits by the National Financiera de Desarrollo Agropecuario, Rural, Forestal y Pesquero (FND) has financial intermediaries and the producers themselves in uncertainty.

Noel Aguilera, president of the Board of Directors of the State Association of Sofomes de Chihuahua (Asofich), said in an interview that although the FND has not said that it is going to disappear, the order to stop granting loans to the union is a clear message that they are going to suspend operations.

We see this as a systemic risk, because it affects both financial intermediaries, producers of all kinds and, definitely, it impacts the entire country,” he told El Economista.

He explained that with the FND’s decision to pause credits, it will not be honoring those credits that have already been contracted by both financial intermediaries and producers.

“Many of them are long-term contracts, five years, so you are working well with your credit, you are paying and suddenly you can’t. So, when the financial company closes in a context as abrupt as this, we are not seeing an exit plan,” she added.

In this sense, he explained that although there are some exceptions where the credit will not be paused, there is also no clarity on the requirements and procedures to enter into such exceptional cases.

“This is a very sensitive issue for the countryside, for agricultural entrepreneurs, for financial intermediaries, and the reality is that we as associations are doing the following to be able to determine the size of the damage as a sector and, based on that, propose the exit strategy, try to negotiate an exit strategy”.

credit break

According to a notice dated December 15, 2022, the FND informed that all credit granting will be paused and, in turn, priority will be given to advance payments of credits held with international organizations, according to a document sent to the regional coordinators in charge of the Regional Coordinations.

The document specified that new credits may not be granted or credit resources that have previously been contracted may not continue to be dispersed, except in “those pre-existing cases of a particular nature in which intermediaries or receiving companies are in a current portfolio and it is justified that the lack of credit resources may result in the intermediary or the company in question not being able to maintain a current portfolio”.

This is an agreement adopted at the Hundredth Ordinary Session of the Institution’s Board of Directors, whose document is signed by Omar Sánchez Villegas and also states that, in line with a September agreement, it is stipulated that all resources obtained from any source of liquidity must be concentrated in the Treasury of the institution.

The foregoing will be used solely and exclusively for the advance payment of credit lines with international organizations, until it is completed. The FND has loans with institutions such as the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB).

ana.martinez@eleconomista.mx