Colombia’s government neglect is impeding the country’s economic recovery as entrepreneurs are blacklisted by banks who are waiting for the approval of a grace period.

Congress approved the “clean slate bill” in June last year already that would remove some 2 million Colombians from legal loan sharks’ blacklists, allowing them immediate access to financial services.

The bill did not seek to waive any debt, but give people a 12-month grace period to pay off their debt and allow them to be removed from financial institutions” blacklist in a shorter period of time.

Reactivating the economy

Congress passed with the bill with urgency in June after the coronavirus and a month-long shutdown in April plunged Colombia’s economy in the worst crisis in history and many needed access to credit to restart their businesses.

After the court remained quiet, one of the sponsors of the bill, right-wing House Representative Cesar Lorduy (Radical Change) filed an open information request to ask what was keeping the magistrates.

The court responded that it never received the bill from Senate secretary Gregorio Pachecho and House secretary Jorge Humberto Mantilla.

Constitutional Court

Poor banks and loansharks

The thing is that Colombia’s banks opposed the law, claiming that the removal of citizens from their blacklists would increase their risk, and the banks bankrolled President Ivan Duque’s election.

Additionally, legal loan sharks like Datacredito saw their revenue plunge Colombians couldn’t even pay their debts because of the coronavirus.

Datacredito’s revenue between 2019 and 2020

Congress adds pressure

Under pressure from Congress, Pachecho and Mantilla finally sent the bill to the court in August.

In December, Senators David Barguil (Conservative Party) and Luis Fernando Velasco (Liberal Party), who also sponsored the bill, said that the court had been waiting since September 1 because also the Interior Ministry failed to send information.

Senators David Barguil and Luis Fernando Velasco

Financial and economic institutions began to lower Colombia’s economic recovery projections as both exports and domestic consumption picked up slower than expected.

The court still hasn’t been able to study the “clean slate bill”, but seven months after it was passed a light has emerged at the end of the tunnel and Colombia’s entrepreneurs might finally get access to resources.

Interior Minister Alicia Arango, who may have believe “access to resources” referred to her husband’s alleged embezzlement of $500,000, resigned in December.