As part of its Agrarian Debt Restructuring reform, the Peruvian Congress has passed a Special Agrarian Restructuring Law, to provide financial facilities to those farming producers affected by natural disasters in areas declared to be in a state of emergency resulting from the Coastal Niño phenomenon. The law affects those with unpaid debts with institutions in the financial system that are regulated by the Banking, Insurance and Pension Fund Administrators authority (IFIs), and makes provisions to eliminate the unpaid debts.
The Special Agrarian Restructuring Programme (i) gives farming producers affected by natural disasters who are in areas that have been declared to be in a state of emergency, and who have outstanding debts with IFIs, a discount coupon; and (ii) refinances the corresponding debt balances, after applying this coupon.
IFIs will determine who is eligible to be a beneficiary of the Special Agrarian Restructuring Programme (SARP); the deadline to present applications is 31st December 2017.
The SARP will cover debts with an unpaid balance of up to 5 tax units (UIT)* or their equivalent in US dollars, to which end the Ministry of the Economy and Finance has been authorised to transfer PEN 20 million to Agrobanco, which in its turn will be responsible for managing the SARP.
The discount coupon will have a ceiling of 1.5 tax units on the debt, the debt being the capital, interest, late payment penalties and other expenditure incurred.
Debt restructuring and reprogramming
- Restructuring of the outstanding debts will be applied as follows:
- 80% discount coupon on debts of between 1.5 and 3 tax units or the equivalent in US dollars, of the debt without capital.
- 50% discount coupon on debts of between 3 and 5 tax units or the equivalent in US dollars, of the debt without capital.
- The balance of the remaining debt will be refinanced at interest.
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* One UIT (Unidad Impositiva Tributaria) is worth PEN 4,050.00 in 2017