Cuba Makes Loans Easier for Self-Employed

HAVANA TIMES — The Cuban government is making lending to the island’s “self-employed” sector more flexible with new measures that include the acceptance of personal goods/property as collateral for loans, reported the official media on Thursday.

Applicants can now apply for loans from state banks using collateral that includes jewelry, vehicles, agricultural holdings and second homes (which some Cubans have for their vacations), according to information published in the official Granma newspaper.

Loans to farmers and other “self-employed” workers, authorized in December 2011, had been previously conditioned on presenting monetary guarantees including third-party bank deposits and commitments on future income, noted DPA news.

Increasing the self-employed sector constitutes one of the reforms most actively pushed by Raul Castro’s government in recent years to “update” the island’s economic model with market elements.

The new regulations aim at offering more alternatives to people to access credit by allowing banks to accept non-traditional forms of collateral.

Property such as jewelry or any other precious metals or gemstones, patrimonial assets, agricultural assets such as cattle and tractors, vacation housing and vacant lots will now serve as a guarantee, reported Granma.

The new regulations are part of the market reforms that Raul Castro, 81, has promoted since he took office seven years ago. Under his government, Cuba has promoted various measures to reduce the state monopoly that has characterized the island for decades.

In addition to these new measures, in recent years Havana has made it considerably easier to engage in self-employment and has partially liberalized the buying and selling of housing and cars.

Among these “decisions made to make the economy more dynamic,” the island’s official media also announced that “self-employed” Cubans will be allowed to receive payment in hard-currency convertible pesos (equivalent to the US dollar), owed them by companies and other “legal entities.”