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Companies in the primary sector borrow more than 22,500 million euros, in total

The stock credit alive destined for companies in the primary sector has continued to grow during the first half of 2021, contrary to what has happened in the rest of the sectors. Although it has done so at a much slower pace than it had been doing in the last year, according to the consulting firm AIS Group.

The balance of this portfolio has increased by 1.1% in these six months, going from 22,285 million euros in December to almost 22,520 million in June, according to data from the report “Evolution of credit to companies in Spain 2021”, prepared on the basis of data from the Bank of Spain by the consultancy.

The portfolio of loans to companies agricultural, livestock and other productive activities of the primary sector It is one of the smallest for business financing in Spain. As of June 2021, it barely represented 3.8% of total loans to productive activities, compared to 19% for industry, 15% for commerce or 14% for real estate. In total, the credit allocated to companies in Spain at the end of the first half of 2021 was around 572,000 million euros.

The majority trend in terms of indebtedness of companies has been mainly down this year. The period between December 2020 and June 2021 has meant a decrease in outstanding credit of 3,100 million euros, a reduction that reaches 12,000 million if June 2020 is taken as a reference. However, companies in the primary sector escape this trend . Its level of indebtedness continues to rise, although slowing down the pace.

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Refering to delinquency, the total of doubtful loans among those granted to companies in the primary sector has been lowered by just over 60.2 million euros, remaining at the end of the first half of 2021 at 1,173 million euros. This has caused the delinquency rate of companies in this segment to drop 3 tenths, standing at 5.2%.

Technology to keep credit and delinquencies under control

Despite these data and to face a foreseeable scenario of a generalized increase in non-performing loans, financial institutions are applying technology to improve your credit risk management.Among the projects we carry out in AIS, the use of techniques such as machine learning to develop evaluation models for loan applications is increasingly common, whether for operations with individuals, freelancers or companies “, says the economist and director of institutional relations of AIS, José Manuel Aguirre.

It is also frequently used in monitoring systems, such as the generation of early alerts that warn of signs of a possible deterioration of the portfolio, and even in tools for the recovery of non-payments, to define the most appropriate recovery strategies for each profile and moment.

According to Aguirre, this growing interest in AI is justified by its great predictive power – compared to traditional methods – and its ability to optimize decisions. “Techniques such as machine learning allow thousands of variables to be considered in the analyzes, so the level of accuracy of the predictive models that use them is much higher, which is a highly valued feature in the financial business ”.

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