ProCredit targets 18-20% lending growth in 2011 on economic recovery

- Tuesday, July 5, 2011

ProCredit targets 18-20% lending growth in 2011 on economic recovery

Commercial microlender ProCredit Ecuador is targeting 18-20% credit portfolio growth this year on the back of the country's economic recovery, CEO Pedro Arriola told BNamericas.

"Given the good pace of growth we had in the first half of the year, we think we may even beat that target," Arriola said.

ProCredit Ecuador is part of German development-oriented financial group ProCredit Holding, which runs six other banks across Latin America.

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The bank lends almost exclusively to small businesses, with loans mostly ranging between US$2,000 and US$150,000.

"Consumer credit is outside our mission, and we don't provide it in any form," the manager added.

At end-May, ProCredit held US$291mn in loans, compared to US$270mn at the end of last year and US$235mn at end-2009.

Despite the growing state involvement in Ecuador's microcredit industry under President Rafael Correa, there is still room to grow for commercial-minded lenders, Arriola said.

Under Correa, public banks began offering subsidized microcredit at annual interest rates of only 5%, thereby undercutting commercial lenders.

Arriola noted that ProCredit's focus is on a different kind of small firm - those that do not need to finance their operations through subsidized loans.

The full interview with Arriola will be published in this week's Banking Perspectives, for subscribers only.