Responsibility of the State for the extinction of Mypyme in Colombia

Since the beginning of the quarantine, the Government's message to businessmen has been clear: "no massive layoffs or contract suspensions will be authorized because the State has decided to guarantee up to 90% of the payroll loans disbursed to companies". But, having done their homework, the Mipyme realize that -despite the promise of government support- the banks do not disburse sums of money to those they do not consider creditworthy. Nevertheless, they must keep their staff intact or resort to such unrealistic strategies as granting more early vacations or giving teleworking functions to a workforce that 95% of them cannot work from their homes.

This strategy of the Government can only be considered as a "washing of hands", which allows it to show its magnanimity to the business community by deciding to back 90% of the credits but without giving an imperative mandate to the banks to disburse.

The President has said that "when the Government guarantees 90% of the debt, there is no pretext for not disbursing credits" and that he will review with the Financial Superintendence that indeed the credits for "micro, small and medium-sized enterprises (Mipyme) are being disbursed". But in the absence of a mandate or order to the banks to make disbursements, businessmen must submit to the banks' client selection criteria and pray to be admitted. The topic of discussion is no longer the granting of subsidies or zero interest financing for the payment of payroll; now the only thing that is expected is that the Government makes the banks comply with its mandate to place these monies in the bloodstream of the companies to comply with its imperative mandate: not to carry out collective layoffs or suspend labor contracts.

This is how the businessmen's days go by, knocking on doors and sending documents (or producing them, as is the case with the projected cash flows for 36 months, the company's reactivation plan, among others) to later hear reasons such as: "we need to visit the company's facilities (in the middle of mandatory quarantine?!)" or "the bank's credit committee did not approve new credit quotas, so please try again in six months (where will we be in six months?)". To other businessmen, banks have made proposals to lend them resources for working capital (i.e., to pay payroll in times of pandemic) at an interest rate of DTF + 19.63, which is practically equivalent to the interest paid by credit cards (almost 2% per month). In the face of the latter, it is not known if the remedy is worse than the disease.

There are 1.6 million formally registered micro, small and medium-sized companies in the country, which generate 80% of employment (Portafolio, 24/04/2020). The mandate given by the Government to entrepreneurs is only admissible if it is accompanied by an insurmountable mandate to banks to disburse resources for working capital and payroll without any kind of conditions.

Otherwise, no businessman can be forced to do the impossible, because without income or state aid, it is impossible for businessmen to meet their obligations. And if for this, the State must respond for 100% of the credit, then this measure must be applied immediately. If the Government does not impart an insurmountable instruction to the banks to place these resources in the economy, it will have to respond patrimonially for the antijuridical damage caused to the entrepreneurs, given its omission in the effective implementation of the rescue measures to keep the entrepreneurial ecosystem alive.