Mortgage Loans: The Government is Considering a Plan to Boost Loans with FGS Funds from ANSES

The Government revealed that it is analyzing the use of resources from the Sustainability Guarantee Fund (FGS) of ANSES to boost mortgage credit. The Minister of Economy, Luis Caputo, confirmed that he is working with the Ministry of Human Capital on an alternative for the fund to bid for long-term fixed-term deposits among banks.

The initiative was disclosed by Caputo in response to a question from Ámbito during the press conference he held this Thursday. "It is something we are analyzing with Minister (Sandra) Pettovello and her team," said the head of the Treasury Palace, although he clarified that the mechanism is still under study.

The proposal aims to address one of the main obstacles that financial entities face in expanding mortgage loans: loans are granted for terms that can extend over decades, while a large part of bank funding comes from short-term deposits.

In this regard, the Minister ruled out one of the alternatives that had been proposed to the Government: that the FGS directly purchase the mortgages originated by financial entities, allowing banks to recover those resources to lend again. "The FGS cannot be buying mortgages from individuals because that is not the FGS's job," he stated.

Instead, the Economy Ministry is studying how to leverage the investment horizon of the pension fund to generate bank deposits for several years. "Since the FGS is a fund with a long-term objective, it could indeed make long-term fixed deposits," Caputo stated. The initiative has already been discussed with Human Capital, the FGS, and financial entities, where, according to the Minister, it received a positive reception.

The mechanism would include competitive bidding for FGS resources, in which banks would offer different rates to attract long-term deposits. In this way, the fund could choose the most advantageous proposals, and the entities would obtain resources with terms more aligned with their mortgage portfolio.

"If it is a fixed term of two years, there may be a bank that says: 'I am willing to pay UVA plus 3'; if it is for five years, 'I am willing to pay UVA plus 4', whatever it is," Caputo exemplified. Then, the FGS would decide based on the received offers at what term to place the money. For the minister, the bidding would also allow for the allocation of those funds to be done "in a very transparent manner."

The Economy Ministry's diagnosis is that the limited development of long-term savings restricts the financial system's capacity to expand this type of loans. "Today, in our capital market, which is practically non-existent, there are no long-term deposits," the official pointed out. With the participation of the FGS, banks could reduce that mismatch without the fund having to get directly involved in the purchase of individual mortgages.

Caputo also linked the project to the Government's decision to broaden companies' access to credit in dollars. According to him, real estate developers are among the sectors that have most requested this possibility. "We have the land, we have 20% capital; if we can get another 30%, we would go for it," the minister recounted about the proposals he received from the sector.

If realized, the Government would thus seek to stimulate both ends of the real estate market: facilitating financing for new developments and, on the buyers' side, generating more funding so that banks can expand their mortgage offerings. "It is something we are studying, that could come out," Caputo affirmed, considering that the scheme with the FGS would be a complement that "would really fit very, very well" with the announced measures to expand credit.