News

More credit for agricultural, livestock and fishing activities in 2021

In the year 2021, credit for agricultural, livestock and fishing activities grew by more than 660 million euros, reaching close to 23,000 million euros at the end of the year, according to the report “Evolution of credit to companies by activity sectors in Spain 2021”, published by AIS Group.

This growth in credit in the primary sector contrasts with the 0.7% reduction in the total balance of credit to companies in Spain in the last financial year, which represents a reduction the volume of loans of about 4,000 million euros, reaching around 571 billion euros. Contrary to the bulk of the companies, the set of companies in the primary sector have continued with an upward trend in their indebtedness.

Uptrend since 2015

Credit to the primary sector in Spain has been on an upward trend since 2015. As in most business segments, the arrival of the pandemic in 2020 accelerated its growth, which was especially reflected in March 2021, when the variation rate annual reached 4.6%. After a few months with a slower increase, with rates below 2%, December again marked a rebound to reach 3%, which leaves the portfolio with a balance of 22.9 billion euros in loans. Even so, the credit to these companies barely represents 4% of the total financing for all productive activities, which at the end of 2021, amounted to just over 571,000 million euros.

A positive note is that, in the last year, the amount of doubtful loans granted to the primary sector has been reduced from 1,230 million to 1,189 million euros. This has caused the decrease of 3 tenths in the delinquency rate, remaining at 5.2% compared to the 5.5% registered as of December 2020.

Warning, scroll to continue reading

Although the situation is complicated for companies in this sector, as they are strongly affected by the uncertainty caused by the evolution of the current war in Ukraine and the national and international economic outlook. Thus, the probability that they will have to continue borrowing to carry out their activity is high, so it is not surprising that we will again see positive variation rates in the coming quarters.

One of the great concerns of banks and finance companies is to control credit risk so that delinquency does not skyrocket and, with it, the necessary provisions, and they do so by applying technology to improve the management of both loan granting and monitoring. and recovery.

According to the commercial director of AIS, David FernandezAmong the projects we carry out at AIS around the world, it is increasingly common for entities to resort to the use of techniques such as machine learning to develop evaluation models for loan applications, whether for operations with individuals, freelancers or companies”. It is also frequently used in monitoring systems, such as the generation of early alerts that warn of indications of a possible deterioration of the portfolio, and even in tools aimed at recovering bad debts, to define the most appropriate recovery strategies for each profile. and moment.

This trend is justified by its high predictive power -compared to traditional methods- and its ability to optimize decisions. The machine learning methodology, for example, allows thousands of variables to be considered in the analyses, 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 and more so in the current context.

According to David Fernandez, “it is expected that there a strong rise in blackberry in the coming months and the Bank of Spain has made several notices in this regard. Improving control systems to detect signs of deterioration before they become real defaults is essential for banks and finance companies”.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *