The president of the Official Credit Institute (ICO), Manuel Illueca, announced that from Friday Spanish financial institutions will be able to join the new line of ICO guarantees, aimed at providing financing to people affected by the recent High Level Isolated Depression (DANA) . This program, approved by the Spanish government, has a total budget of 5 billion euros and aims to offer an immediate economic response to 32,000 companies and 150,000 homes, especially in severely affected areas such as Valencia.
Illueca explained that once the membership of financial institutions is completed, loans will be available to those who need to recover their business or rebuild their damaged properties. The operation will begin with the first tranche of 1,000 million euros, and other tranches will be activated based on the needs identified in the weekly monitoring. This scheme will allow liquidity to be brought forward until the arrival of direct aid and compensation from the Insurance Compensation Consortium, which are crucial for recovery in the most affected areas.
Help methods for families and businesses
- Loans to affected families: The first method is aimed at individual consumers who reside or work in the affected areas. These loans, with an 80% state guarantee, do not require additional guarantees and will be exempt from opening and repayment commissions. Furthermore, they provide for a waiting period until the consortium makes the compensation effective. This means families will not have to pay principal or interest until they receive compensation, facilitating a quick reactivation of their lives.
- Aid to businesses: For the business sector, the ICO has devised a second financing modality that allows companies to access funds based on the help requested. As companies receive this aid, interest will be paid. Given that DANA has affected the production capacity of many companies, this option considers a specific line to restore operational levels and face the full recovery of their activities.
- Additional guarantees for the agricultural and productive sectors: For companies that need to make significant investments to restore their production, ICO offers loans with terms of up to ten years for the agricultural sector and up to seven years for other sectors. Businesses can access financing of up to 12.5 million euros, with flexible conditions that adapt to state aid legislation.
Zero cost and flexibility in accessing funds
Illueca also highlighted that the ICO guarantee system is presented without additional costs for financial institutions, benefiting interested parties by reducing loan costs. The Government hopes that these conditions will allow an agile and sustainable economic recovery for the victims, preventing liquidity problems from hindering the reconstruction process.
This measure is one of many implemented by the Spanish government in response to the severe damage caused by DANA, and reflects a commitment to ensuring that aid reaches “every corner of the affected area”. According to Illueca, these measures do not replace direct aid, but should provide immediate support to families and businesses while awaiting the arrival of compensatory resources.
What are the key features of the new line of ICO guarantees for families affected by the High Level Isolated Depression?
Interview between Time.news Editor and Manuel Illueca, President of the Official Credit Institute (ICO)
Editor: Good morning, Manuel! Thank you for joining us today. With recent events around the High Level Isolated Depression, many areas have experienced severe disruptions. Can you explain how the new line of ICO guarantees aims to support those affected?
Illueca: Good morning! Absolutely, and thank you for your interest. The recent DANA has greatly impacted many communities, especially in regions such as Valencia. Our new line of ICO guarantees allows Spanish financial institutions to extend loans specifically for those affected. We have a total budget of €5 billion to ensure that both families and businesses can access the financial support they need to rebuild.
Editor: That’s a substantial amount of funding. Can you dive into how this funding will be allocated and what the process looks like for those in need?
Illueca: Certainly. Initially, we’re rolling out a first tranche of €1 billion. As financial institutions engage with the program, we will release more funds based on ongoing assessments of needs in the affected areas. Our objective is to provide immediate liquidity to help individuals recover their businesses or rebuild homes while they await direct aid from the Insurance Compensation Consortium.
Editor: It sounds like a well-thought-out plan. Could you share more about the specific types of loans available for families and businesses?
Illueca: Of course. For affected families, we are offering loans that come with an 80% state guarantee. This means no additional collateral is required, and we’ve removed commissions for both opening and repayment. Families won’t start making payments until they receive compensation from the consortium, effectively easing their financial burden during recovery.
Editor: That’s quite accommodating! And what about businesses? How does the ICO plan to assist them?
Illueca: For businesses, we’ve introduced a second financing modality tailored to support economic recovery. This includes different loan structures that will ensure companies can maintain liquidity and quickly bounce back from the economic impact of DANA. Our aim is to empower businesses not only to recover but to thrive post-crisis.
Editor: This is certainly welcome news. What are some of the challenges you anticipate in implementing this program?
Illueca: One of the primary challenges will be ensuring that financial institutions are mobilized effectively and that they can reach the affected communities promptly. Additionally, as we monitor the evolving situation, we’ll need to dynamically adjust our funding to guarantee that the most pressing needs are met.
Editor: It sounds like a continuous process of assessment and response. Lastly, what message do you want to convey to those who are affected and waiting for assistance?
Illueca: I want to assure them that we understand the difficulties they are facing. The Spanish government is committed to providing swift and comprehensive support, and we are here to facilitate recovery. We encourage those affected to reach out to their local financial institutions once they are onboarded into this scheme. Help is on the way.
Editor: Thank you for your insights, Manuel. Your initiatives are pivotal in helping Spain recover from this disaster. We wish you the best in these efforts!
Illueca: Thank you! It’s a collective effort, and we’re determined to support our communities through this challenging time.