The Reciprocal Guarantee Society (SGR) Extremeña de Avales (Extraval) has provided a volume of loans to SMEs, self-employed workers and entrepreneurs in Extremadura worth 8.8 million euros in 2014. These operations have been channeled from 294 guarantees .

These are some of the data analyzed at the Ordinary Extraval General Meeting, which has served to give the green light to last year’s accounts and which has allowed analyzing the activity data of the company.

At the end of 2014, Extraval has accumulated a “historic” figure of formalized guarantees of more than 154.9 million euros, from more than 4,343 operations. With these funds, the action of the Extremaduran SGR has led to an induced investment of 201.4 million euros.

At the end of last year, the number of current operations accumulated by the guarantor society of guarantee from Extremadura was 914. Its contribution to employment, based on this current risk in force, stands at more than 4,000 jobs, spread among 593 companies

On the other hand, the participants (companies that access financing from the SGR and contribute a small commission that, in a mutualistic way, allows financing to other partners that come to the company) of the entity were 1,394 as of December 31st. , and the number of protective partners was already at seven, the Extremaduran government reports in a press release.

Both Extraval and the rest of the remaining Spanish guarantee companies are immersed in an ambitious Strategic Plan that seeks to give greater prominence to a system of guarantees through which the necessary conditions can be created to convert viable business projects into tangible realities by facilitating financing.

This Strategic Plan of the Spanish Confederation of Guarantee Societies (SGR-Cesgar) aims to increase the number of companies supported throughout the country by 25,000 new SMEs this year and next, as well as a 50 percent growth in the number of formalized risk (amount granted in the form of loans / credits), up to 1,400 million euros, when the end of 2014 stood at around 900 million in the sector.

In total, the SGRs maintain a live risk (amount borrowed pending repayment) of 4,350 million euros in 116,000 financing operations throughout Spain. A fact that has – according to the Extremaduran Executive – a “clear impact” on support for employment, in particular, that companies financed with the guarantee of a guarantee society have allowed to maintain about 650,000 jobs in Spain.

Regarding repayment terms, six out of ten SMEs that attend an SGR such as Extraval face the amortization of their loans or credits in a period exceeding eight years. And in 92 percent of cases, the established return period is over three years.

Precisely the length of the deadlines is one of the competitive advantages that the guarantee companies offer compared to the traditional financing channels, something that makes the monthly quotas more affordable by the companies.

Along with this, more favorable and advantageous conditions stand out, as shown by the fact that the average amount guaranteed in 2014 was, in two of every three supported operations, less than 66,000 euros.

A historical sector for employment

At the close of 2014, the group of Guarantee Companies accumulates a historical figure of formalized guarantees for more than 27,500 million euros, from more than 700,000 operations. With these funds, the action of the SGR has led to an induced investment of 35,759 million euros in Spain.

Its contribution to employment stands at almost 650,000 jobs, distributed among 36,000 companies. In the case of Extraval, the number of current operations that accumulated at the end of last year was 914.

On the other hand, it should be noted that the sector has historically granted more than 80 percent of the applications submitted, which “demonstrates” the “reliability” of the SGR (intermediaries between SMEs and credit institutions) and the “high commitment” of the beneficiary companies when returning the amounts received.

The number of protection partners and partners in the reciprocal guarantee companies (that is, the shareholders, whether public institutions or SMEs) has increased during 2014 and there are already 116,662 operations promoted by these mutual entities.

Regarding the size of the companies, 75% of the guarantees have been destined to micropymes (companies with between one and ten workers).

Products and sectors

During 2014, the most demanded products by Spanish SMEs were those destined to financial guarantees (56 percent), whether they were investment or circulating fundamentally, while technicians (guarantees for public tenders) accounted for 44 percent, according to data from SGR-Cesgar.

Regarding the distribution according to the activity of the company, the services sector has led in Spain the number of operations with a percentage of 41 percent, followed by Industrial with 25 percent; El Comercio, with 19 percent; Construction, with 12 percent; and the Primary, with 4 percent.

The lack of financing due to the shortage of credit continues to be entrenched as one of the main problems of the crisis, which is suffocating families and small and medium enterprises. The president of the Government, Mariano Rajoy, recognized just a few weeks ago that the evolution of credit in Spain is “still very unsatisfactory”, and urged financial institutions to “be up to the circumstances” to grant it to those people that they have done “good things, comply and have the right” to finance their projects.

Meanwhile, the need for alternatives to the lack of liquidity has turned the mountains of piety into a resource increasingly used by those who need to deal with transitory needs. Born in the fifteenth century in Italy and germ of the disappeared Savings Banks, the mountains of piety are based on what is called pledge loans. That is, they are granted with the sole guarantee of the pledge, which in this case are jewels, and depending on their value. These jewels are deposited until the cancellation of said loan.

This model is gaining momentum because many people are staying out of the credit system “Their sense is that people jewelery can find liquidity when already you have exhausted all other avenues or very difficult to access them. It’s a chattel loan, but not bleeding and eliminates the usury of the ‘Buy Gold’ ‘, says Pau A. Montserrat, chief economist at iahorro.com.

Although since the beginning of the crisis the number of mounts of piety has been reduced as a result of the process of consolidation of the entities that make up the sector, more and more is being used. In 2007 the number of active pledge forests was 21 and today they have activity 14, while the number of entities has gone from 45 in December 2009 to 14 groups today.

“What has increased is the number of people who have to resort to this procedure, their way of working is less aggressive towards the client”, says Fernando Herrero, spokesman of the Board of the Association of Users, Savings Banks and Insurance (ADICAE) .

The process is simple and fast. The minimum amount that can be requested is € 300. In the Monte de Piedad, the immediate valuation of the pieces is proceeded, according to which the maximum amount of the loan is calculated, which is paid in cash on the spot. The customer can recover their belongings at any time or when the expiration date, after cancellation of the loan, or request a renewal of another year that is usually granted if a minimum capital is amortized.

La Caixa is one of those that is betting in this way and has opened its fourth branch in Madrid, after Barcelona, ​​Seville and Tenerife. “This model is gaining strength because many people are staying out of the credit system and the social microloans that we offer are the only way to finance themselves, ” explains Delfín Martín, Director of the Madrid office. “For many people, it’s their only lifeline,” he adds.

More social alternative

“In principle, it is a more social alternative, if prices are offered above the market, of course, it is to return a little to the origins of the Savings Banks that should not have been forgotten,” says Pau. And will not Montes de Piedad be a rescued formula to improve the image of the financial sector? “It’s likely, maybe it does, but if it gets to benefit someone who is in trouble, that’s secondary.”

It is an option for people who do not have another Delfín Martín denies, flatly, the face-lift: “No and no.” In Microbank, which manages Monte de Piedad de La Caixa, which has 30,000 clients and a portfolio of 43,000 microcredits. for a total amount of 58 million euros – we have been giving microcredits of this type for more than ten years, it is an option for people who do not have any other, only the DNI or the residence card is necessary “.

“With the liquidation of the Savings Banks, the Montes de Piedad have remained like the traditional pawnshops in which anyone can go to wear a family jewel or grandfather’s watch with the hope of recovering it when the situation improves,” says Herrero .

At the end of 2012, 14 Montes de Piedad were computed in Spain with La Caixa activity, Caja Granada, Unicaja, Ibercaja, CajAstur, Sa Nostra, Caja de Canarias, Caja Cantabria, Caja Círculo, Caja España – Duero, Caja Madrid, Badajoz , Nova Caixa Galicia and Bancaja.

On November 22, the Supreme Court issued its ruling in the case of those affected by mortgages referenced to the IRPH index, the Reference Index of Mortgage Loans. The magistrates gave the reason to a financial institution to consider that the use of this index in mortgage contracts is not in itself opaque or abusive . They estimated that the mere reference of a mortgage to this official index does not imply consumer abuse. Almost all the judges agreed, but not all.

There were discrepancies. In the opinion of the judges Francisco Javier Orduña and Francisco Javier Arroyo, this argument is “not adjusted to law”; they consider that the clause does not go beyond the transparency control . Encouraged by the private vote of these two magistrates of the Supreme Court, the clients with mortgages referenced to the IRPH index (approximately one million families) already think about raising their case to European courts.

Two judges questioned that the clients had sufficient information about what they were signing For Orduña and Arroyo, the entities that use the IRPH compared to other more usual indices at the time of contracting such as the Euribor, would have to establish their “scope and specific functioning , so that the consumer is able to assess, based on accurate and intelligible criteria, the economic consequences assumed “. Especially since it is a complex product for the average customer, both because of the way it is calculated and because of its “peculiar configuration”, which makes it “necessary” to actively facilitate adequate and comprehensible information about its application.

They thus adopt the position of the two previous instances on the abusive nature of the clauses introduced by Kutxabank in a mortgage contract, as the lack of information in the pre-contractual phase, as well as in the perfection and execution phases, is proven “. The judges Orduña and Arroyo explain that limiting this control to formulations that “disregard or do not reflect the importance or incidence that this index has to assess the scope of the commitment” is incorrect, which is why they question this point of the judgment.

Specifically, the verdict ensures that it was “easily accessible” to an average user, “normally informed and reasonably attentive and insightful”, to compare the conditions used by different lenders in an element “as essential as the loan itself”. Reason for discarding that, to determine the transparency of the clause, it is necessary for the bank to verify that the consumer has noticed the economic and legal importance of the operation.

In addition, the Supreme Court contends that comparing the evolution of the IRPH with respect to the Euribor , which has had a “more favorable” behavior for the mortgaged, “can not serve as a guideline for transparency control” since it is done from a retrospective bias. And he insists that it can not be said that the IRPH is more expensive when the loan in question, agreed in 2006 for a period of 35 years, “has not yet reached the third part of its term and it is unknown what will happen in the 24 years that still remain for its extinction. ” But, as the private vote says, since its application, the index has remained in values ​​”superior to other more usual and known”.

The EU Court has already ruled against the ground clauses The lack of a full consensus on the part of the plenary session of the civil court keeps the clients who subscribed mortgages of such characteristics, who return to point to the community justice after the success harvested a year ago in the Court of Justice of the European Union (CJEU) with the retroactivity of the ground clauses.

A way to which they came after hearing the disagreeing opinion of Judge Orduña, who supported the reimbursement of the amounts charged by the entities in an improper way for this concept in the ruling, now revoked, in which the high court imposed the 9 May 2013 as the time limit for making the returns. This is highlighted by the president of the Association of Financial Users (Asufin), Patricia Suarez, who encourages the fight against bank abuses and, in particular, against an IRPH whose resolution begins to approach Luxembourg.