VIO News Blog

June 18, 2008

Venezuela’s Banks Branch Out to the Poor

Filed under: Daily News Roundup — VenWorld @ 2:34 pm
Tags: , ,

Banks in Venezuela are being encouraged by the government to do business in poor neighborhoods which lack access to financial services, according to Reuters. On the rise are small loans to low-income clients, an approach known in the development field as “microfinance.” The Chavez government has practiced microfinance for years, distributing loans of around $200 to many thousands of poor entrepreneurs. Now, major institutions like Banesco and Banco de Venezuela have small loans divisions. Reuters points out that those banks must lend to middle-class and poor clients at the same rates. New regulations on banks also require them to lend to small businesses and control interest rates on manufacturing and agricultural loans.

In international relations, Spain’s Foreign Minister met yesterday with President Chavez and Venezuelan Foreign Minister Nicolas Maduro. Dow Jones reports that the representatives indicated a willingness to work together and mend a recent diplomatic row. “From now on there will be an intense agenda of contacts at all levels: political, economic, commercial, investment and Latin American issues,” the Spanish rep said. Meanwhile, video footage of Chavez’s trip to Cuba this week is making news because the veteran leader has been out of the public eye since January. The AP reports that Chavez and Fidel discussed energy cooperation and food security.

A Washington Times column today sorely misjudges the Andes region and the policies of elected governments in Venezuela and Ecuador. It asserts that Presidents Chavez and Correa were “forced” to favor disarmament in Colombia, when in fact, they have consistently and quite voluntarily called for peace all along. Despite Colombia’s unfounded claims, Venezuela and Ecuador never had a policy of helping rebels. The Times also wrongly deems the three-times elected Chavez is a “self-appointed” leader, and it exaggerates food shortages and claims anti-poverty programs “squander” oil wealth.

Finally, oil prices remain in the news. The AP reports that a group of U.S. Senators asked the Bush administration to confront the World Trade Organization about OPEC. The Senators claim that “the very existence of OPEC” violates trade rules. The group of oil producing countries dates back to the 1960s. A Washington Post editorial weighs in, saying that production levels are not to blame, but that regulators must guard against the “excessive speculation” that drives prices up.


  1. It is encouraging to see that lower income Venezuelans are now afforded access to small loans. But, how are these banking institutions safeguarding the loan recipient’s continuity with payments? We have seen how poor planning and inadequate training for first time home buyers have panned out here in the States.

    Comment by Tirsa Nietez — June 20, 2008 @ 8:36 am | Reply

  2. That is a good point. In Venezuela, from the very beginning the business loans (which are the majority of these) have been paired with training programs that include courses on how to operate small businesses, management, accounting, and other crucial topics.

    Comment by VenWorld — June 20, 2008 @ 8:51 am | Reply

  3. Three cheers for Hugo Chavez and for the wonderful things that are happening in Venezuela under his
    leadership! I was in Caracas for the World Social Forum in January 2005 and enjoyed the visit immensely.
    Let’s hope that the new administration in Washington keeps it hands off of Venezuela. There are many
    of us here in my area (Santa Cruz, California) who are staunch Chavez supporters and we will protest any
    interference by our government in the affairs in Venezuela.

    Comment by Emily Maloney — June 26, 2008 @ 5:12 pm | Reply

  4. Emily,
    Maybe that is why your city is already a sister city with Puerto la Cruz, Venezuela. If you are interested in participating with the sister city program visit Santa Cruz’s official website for more information here:

    Comment by VenWorld — June 26, 2008 @ 5:34 pm | Reply

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