16 billion pesos more to the Welfare Bank

Since 2019 and until the third quarter of this year, the federal government has allocated to the Welfare Bank 16 thousand 767 million pesos more than what was initially contemplated in the budget, despite the lack of complete feasibility analyses of its operations.

In 2019, it was approved a budget of 515 million pesos, but then received an additional amount bringing the total to 6,388 million pesos.

In 2020 it was allocated 5 billion 636 million pesos more and at the end of the third quarter of last year it was granted an additional 5 billion 258 million pesos, when it only had 321 million pesos approved, according to figures from the Ministry of Finance and an analysis by México Evalúa.

According to Enrique Diaz-Infante, director of studies of the financial sector and social security at the Centro de Estudios Espinosa Yglesias (CEEY), federal resources for this bank do not stop because it has shown that its purposes are rather political-electoral, although it is supposed to be focused on financial inclusion.

In addition, he explained, it is receiving more resources to fund its requirements because it has a high overdue portfolio.

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At the end of September, the bank’s delinquency rate reached 18.5 percent, an increase of 7.51 percentage points compared to the same period last year.

The analysis by México Evalúa points out that the expansions of spending to the Welfare Bank have been given freely, despite the fact that, as a project, it lacks complete feasibility analyses.

It explains that in the Treasury’s investment portfolio, 25 investment projects are registered that encompass the total construction of the bank’s branches; however, none of them have technical, legal or environmental feasibility analyses, and 22 have only economic feasibility analyses.

In addition, the organization warns about inconsistent justifications that have been detected in the economic feasibility analyses.

The Government contemplated 2,700 branches of the Welfare Bank by the beginning of 2022, but so far 1,64 have been built, according to the Third Government Report.

Although the objective of the expansion of the bank’s branches is to promote financial inclusion, until December 31, 2020 it did not have a specific programmatic strategy in this area and its objective does not justify the arbitrariness, opacity and lack of fiscal discipline, mentions the organization.

It also criticizes that for next year a budget of 321 million pesos was approved, despite the fact that every year the amount actually spent increases.

Their resources are growing

In the last three years, the Welfare Bank has received more than 5 billion pesos.

WELFARE BANK BUDGET

(Millions of pesos)

YEAR AMOUNT APPROVED AMOUNT SPENT

2016 1,135 1,028

2017 830 695

2018 744 625

2019 515 6,388

2020 516 6,152

2021* 321 5,579

*Figure as of third quarter

Source: Mexico Evalúa