Driven by the pandemic and advances in the digitization of the entire financial world, two financing instruments, especially focused on SMEs, are gaining ground: the electronic check (e-check) and the MSME electronic credit invoice (FCEM) concentrated $ 750,000 million in March, last month with official data. Between them, they already move an amount that represents 20% of total bank loans to the private sector and the projections are for constant growth.
The banks assure that e-check was its star product to face the restrictions of a year with little activity in branches, a lot of virtual operation and SMEs in need of financing to alleviate the drop in billing. Its advantages? It is available to operate 24 hours a day, it can receive up to 100 endorsements, its home banking operation makes it more comfortable and secure and, in particular, it reduces the number of rejections as much as possible. The electronic invoice, for its part, has the advantages of practicality of any digital document to which the possibility of endorsing it or discounting it in the capital market.
Between both financial instruments they already move an amount that represents 20% of total bank loans to the private sector. Projections are for constant growth
The e-check played an important role in the face of the pandemic’s restrictions as a means of payment, but even more vital as a means of financing. In the National Securities Commission (CNV) anticipate that in May, $ 24,800 million were registered in negotiated deferred payment checks (CPD), 46% of the total amount financed in the capital market, with a year-on-year growth of 70% and a monthly growth of 10%. Of that amount, 74% corresponded to electronic checks. Since its entry into force, trading in digital format of this instrument covered 55% of the total volume. Coelsa, the company that is in charge of their compensation, assures that about 1 million e-checks are already issued per month.
“Both the e-check and the FCEM are young instruments that are constantly evolving and improving, but are clear signs that the era of digital SMEs has already arrived in Argentina and there will be no going back, because the infrastructure that supports them is robust. There are good foundations, ”said the analyst Pablo García Arabehety, a former official in the BCRA’s Payment Systems area, who predicts that FCEM trading will “grow exponentially in the coming months”
“This was possible because its infrastructure is conceived with criteria of openness, competition and transparency unprecedented for the banking and securities world in Argentina. Thus, SMEs were left at the center of a new ecosystem with an instrument far superior to its paper version., ”Explained García Arabehety.
An SME can endorse an e-check and send it from its bank’s website without geographical limitations. The analyst exemplified that a winery in Tierra del Fuego can instantly pay a winery in Salta, perhaps obtaining credit from its supplier. Additionally, the winery can improve the check discount options in the local market and obtain the same rates as a Buenos Aires company, or access the stock market without obstacles.
An SME can endorse an e-check and send it from their bank’s website without geographic limitations
The steady development of the e-check served as the basis for launching a similar mechanism to massify electronic invoicing. In that way, On April 1, the Open Circulation System for FCEM came into operation, a platform whose main objective was that invoices, once accepted, could change hands and be collected with the same ease as an e-check.
The Banco Provincia It incorporated the tool into its Internet banking menu and in the first two months of operation it already joined 4,270 companies. The entity explained that the System “guarantees the transparency of the operation and gives SMEs more peace of mind and security” and allows invoices to be transferred or negotiated on the Stock Market through the Stock Market Province.
The e-check discount represents 30% of the total financed by the SME Rectivation Program, the credit assistance plan of the Buenos Aires state bank. In 10 months, 95,000 e-checks were discounted for more than $ 41,000 million and they already exceed the operations with physical checks, since its use is simpler and without time limits. “In order to further promote the placement of this product, the bank unified the rate applied to SMEs for the e-check discount at 25% per annum during May. In this way, the rate for documents of up to 90 days, which was in the order of 26.5% per year, was reduced by 1.5 percentage points; while for the 91 to 180 day tranche, which had a rate of 29.5%, the cut was 4.5 percentage points. After the discount, we credit the money immediately, something that not all banks do”, They told Infobae in the Province.
In the Banco Galicia, the e-check already represents 50% of the operations with checks. “May had the record of operations with 270,000 e-checks issued for a total of more than $ 143,000 million, and 182,000 deposits for $ 82,000 million. This year the operation grew 35% in check amounts and 50% in the amount traded ″, he pointed out. Roberto Lopresti, Product Owner of Checks of the entity, who highlighted the low level of rejections for formal reasons: 7 out of 10 bounced checks for paper, only 1 out of 10 for e-checks. With regard to the FCEM, in Galicia they still consider it in the “diffusion stage, but with great interest” by SMEs.
The pandemic effect triggered the entire digital operation of the payment chain and this particular product is the star of the banking system, the entities agree
Another bank focused on SMEs, Comafi, recorded a sharp increase in e-check issuance, which went from 1,545 documents in April 2020 to almost 12,000 a year later. “This growth was favored in part by the pandemic we are experiencing, which restricted circulation and also the functionalities that were incorporated throughout the year that made the product more competitive., strengthening it as a means of secure payment and 24×7 access through our eBanking ”, they commented in the entity.
On BBVA They explained that they have “a wide range of services linked to this means of payment: from individual and manual issuance to the automatic issuance of up to 10,000 e-checks; the deposit in account and in collection agreements, the custody of the postdated e-checks, the assignment of e-checks in its different variants, the payment through our payment system to suppliers ”. They added that the growth in the use of electronic checks during the pandemic was “astronomical” and last April 85,000 documents were issued for $ 30,000 million. “No other product had such an evolution. The pandemic effect triggered all the digital operations of the payment chain and this particular product is the star of the banking system ”, they added in BBVA.
At the end of May, the bank enabled the possibility of adhering to the Open Circulation System so that its SME clients can “endorse, assign and discount the electronic credit invoice directly from a bank account. This can be done by early collection of credits and receivables issued to customers and / or debtors, with whom they would have entered into a sale ”.