The Argentine Central Bank amended the regulation on credits for productive investment, regarding the eligible credits and the maximum interest rate.
On August 6, 2012, the Central Bank of Argentina (the "Banco Central de la República Argentina" or "BCRA") issued Resolution "A" 5338 which amends the regulation on credits for productive investment, regarding the eligible credits and the maximum interest rate.
In regard to the eligible credits, the financing of productive projects -including the acquisition of fixed assets- is eligible only when the following requirements are performed:
the projects do not belong to the primary sector; the amount of financing to be allocated to purchase real estate does not exceed 20% of the financing nor 50% of the value of the real estate; if the characteristics of the project to be financed, the expected increase in the production of goods and/or services and in the employment, and the impact of the real estate value are reported to the BCRA; and having obtained the prior authorization of the BCRA in respect to the fulfillment of the requirements of this line of credits. Regarding the maximum interest rate, it regulates that if the term of 36 months for which financial institutions shall receive from customers a fixed annual nominal interest rate of up to 15.01 ends, and this rate is not kept, a variable interest rate that does not exceed the total BADLAR rate in pesos plus 400 basic points may be applied.
Additionally, the BCRA issued Resolution "B" 10428 in order to clarify certain aspects of the legislation. Among the most important points, we highlight the following ones:
Minimum application to eligible credits
The minimum quota of 50% for MiPyMEs (micro, small and medium-sized enterprises) is exclusive for this segment. Natural persons who develop a business or micro business activity in their personal capacity may also be included in this segment.
Credits originated under the framework of pre-existing lines of credits may be eligible only if they are new credits that were agreed on and...