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Personal Bank Loans on the Rise in Cuba

Loans In Cuba

“Cuba’s central bank has extended 3.23 billion pesos ($135 million) in personal loans since lending to individuals began in December 2011”, Communist Party daily Granma announced Thursday.

The total of number of borrowers stood at 378,011 as of September 30, Granma said, citing bank Vice President Francisco Mayobre.

President Raul Castro’s administration authorized lending to individuals as part of a new package of reforms aimed at “modernizing” Cuba’s socialist economic model.

“Most of the borrowers have been people wanting to build or renovate homes and small farms,” Mayobre said, acknowledging that borrowing by potential entrepreneurs to start business has fallen short of expectations.

“Surveys have been done and it has become clear that self-employed workers have a lot of doubts and dissatisfaction about the work of the banks,” he said.

The central bank said that it has taken steps to make the process more flexible for borrowers, such as simplifying requirements for documentation and repayment guarantees, while also introducing variable interest rates and terms.

The bank is struggling to meet demand for services and may open new branches in Havana and provincial capitals, Mayobre said.

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