Families and businesses affected by the magnitude 7.4 earthquake on August 10 will have grace periods of up to 12 months with interest forgiveness, suspension of legal collection processes, protection of their credit history, and application of the corresponding bank insurance, as part of a financial sector relief program estimated to contribute 1.1 trillion pesos.
The details were announced by President Abelardo De La Espriella through his X account, following his call to banks to reduce interest rates and adopt measures to alleviate the financial situation of those affected by the tragedy.
According to the president, the program will cover those affected in Caldas, Chocó, Quindío, Risaralda, and Valle del Cauca, five of the departments hit by the seismic event. The estimated 1.1 trillion pesos for these measures will be in addition to the donations that financial entities have already made to address the emergency.
The scope of the relief is significant for households and businesses that, besides having suffered damage to homes, establishments, or productive assets, have obligations with the financial system and could face difficulties continuing to pay their loans while recovering their sources of income.
One of the announced components is grace periods of up to 12 months with interest forgiveness, according to the president. This will be complemented by the suspension of legal collection processes and protection of the credit history of those affected, so that the economic difficulties resulting from the earthquake do not end up worsening their situation with the financial system.
The package also includes the application of the corresponding bank insurance, a factor that can be decisive in those loans that have associated coverage and where the risks foreseen in the respective policies have materialized.
“I want to thank Asobancaria and the entire Colombian banking sector for joining the reconstruction of our Homeland with a relief program for families and businesses affected by the earthquake,” said De La Espriella as he announced the measures.
The announcements come in the face of an emergency that has left more than 120,328 families affected, 26,945 homes destroyed, and more than 127,557 damaged, which anticipates a reconstruction that will require not only public resources but also broad participation from the private sector.
The banking sector is just one of the sectors that have begun to mobilize. The government had also asked builders to contribute part of their profits to housing projects for those affected and announced the creation of the so-called Miracle Fund, conceived as one of the mechanisms to channel resources toward reconstruction, in addition to the housing subsidies planned to assist affected families.
The conditions
According to Asobancaria ―the guild representing banks and other financial entities in the country― the measures could potentially benefit 2.8 million users located in the areas impacted by the earthquake. However, the guild specified that each entity will apply the relief autonomously, according to its internal policies and after individually evaluating the clients’ situations.
The plan includes priority attention and simplified procedures, as well as grace periods of up to 12 months for the most affected cases, redefinition of terms and conditions, and special treatments regarding interest.
Asobancaria clarified that the specific relief measures and procedures to request them will be defined and informed by each financial institution, so it recommended that affected individuals and businesses contact their bank through any of its available channels so that each situation can be evaluated.
The emergency also impacted the physical infrastructure of the financial system. Jonathan Malagón, president of Asobancaria, stated that entities are working to restore service in 533 affected offices, equivalent to 4 percent of the country’s bank branches and 34 percent of those located in Caldas, Chocó, Quindío, Risaralda, and Valle del Cauca.
“Digital channels are operating at one hundred percent,” assured Malagón, who indicated that service continues in all branches without structural damage and that clients have some communication channel with their institutions.