ANNOUNCEMENT 24 Apr 2020

The Chilean government announced the capitalization of the Guarantee Fund for SMEs in response to the Coronavirus pandemic.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Official Gazette of Chile. Biblioteca del Congreso Nacional. Aumenta el capital del Fondo de Garantías para Pequeños Empresarios (FOGAPE) y flexibiliza temporalmente sus requisitos. Available at: http://54.164.21.253/Navegar?idNorma=1144600

Ministry of Economy of Chile. Ministerio de Economía. Elijo Pyme. Plan económico de emergencia. Availale at: https://www.economia.gob.cl/elijopyme

Inception date: 24 Apr 2020 | Removal date: 30 Apr 2021

Loan guarantee

On 24 April 2020, the Executive of Chile adopted Law 21229 approving the distribution of USD 3,000 million to SMEs in the form of loan guarantees in response to the Coronavirus outbreak.

The economic resources will be distributed through the Guarantee Fund for SMEs (i.e FOGAPE by its Spanish acronym). The objective of the guarantees is that beneficiary companies can finance up to three months of sales providing companies with a guarantee of at least 85% of the loans which are also granted a preferential interest rate.

In addition to the capitalization of the fund, the Chilean government also increased the flexibility of the conditions to access the guarantees, making them accessible for companies with annual sales of up to FU 1 million (approx. USD 35 million).

The new conditions apply until 30 April 2021.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A
Inception date: 24 Apr 2020 | Removal date: 30 Apr 2021

Export subsidy

Law 21229 adopted by the Executive of Chile on 24 April 2020, also applies to exporters. Concretely, the capitalization of the Guarantee Fund for SMEs (i.e FOGAPE by its Spanish acronym) with USD 3,000 million to provide loan guarantees for SMEs. Such guarantees will among other activities support export operations.

The objective of the guarantees is that beneficiaries can finance up to three months of sales providing companies with a guarantee of at least 85% of the loans which are also granted a preferential interest rate.

In addition to the capitalization of the fund, the Chilean government also increased the flexibility of the conditions to access the guarantees. In the cases of exporters, the resources are available to companies which in the previous two years have exported goods with a maximum FOB value of USD 16.7 million.

The new conditions apply until 30 April 2021.

 
N/A
 
N/A