The head of the Economic Development Bank for Puerto Rico told members of the incoming administration during transition hearings that the agency approved $499.7 million in financing from January 2013 to present, boosting the economy
EDB President Joey Cancel-Planas said despite the economic crisis, of the 973 cases approved, 763 of them — representing $334.7 million — were successfully closed. Of those closed cases, 319 correspond to new businesses, which in turn succeeded in creating about 4,087 direct jobs in 61 municipalities.
“The Bank has never stopped loaning. On the contrary, during times like our economy is facing, the EDB has loaned double the average balance of cash holdings,” Cancel-Planas said.
“We responsibly fulfilled our mission, while safeguarding our financial institution’s fiscal health,” he said.
To maintain the government agency’s fiscal health, the EDB established new measures when analyzing cases.
“In previous administrations, we saw more financings were granted, but at the same time the levels of delinquencies and losses of the bank were increasing,” Cancel-Planas said.
“We changed quantity for quality. It’s not about approving more funding, but about granting financing to businesses that have real success and repayment capacity” he said during the transition hearing Thursday.
One of the main initiatives the bank has underway, and which Cancel-Planas said “has had a significant impact on the financial institution’s operations,” was the creation of tools such as the online business loan application.
With it, the bank became the first financial institution in Puerto Rico to offer this service. Since its establishment in 2014 more than 1,500 applications have been filed online, he said.
This has streamlined internal processes and shortened the processing time and analysis of loan applications from 180 days to 102 days on average.
“This tool also allows the entrepreneur to create a profile according to the products the system identifies as suitable financing options for them according to their needs or business specifications,” Cancel-Planas said.
More recently, the EDB launched “Business Connection,” a new electronic tool to interconnect customers with each other and with other entrepreneurs, to promote trade among them.
The EDB has a portfolio of about 1,300 customers that provide services and products in a variety of industries. With this tool, the agency “wanted to create a bridge for our clients to communicate and do business with each other. It is a way to open the door to business success,” Cancel-Planas said.
However, and in spite of all the initiatives established to improve the services provided, “one of the greatest achievements of this administration was to maintain a healthy operation and finances, despite the economic crisis affecting the vast majority of government agencies,” he said.
“In the case of the EDB, not only did we have sound management of our financial resources, but we also could contribute monetarily to the central government. Since 2014 the EDB has contributed more than $1 million to the General Fund,” Cancel-Planas said.
To achieve that, the EDB controlled expenses and established initiatives to raise additional revenue for the institution, such as the creation of an insurance subsidiary, with which the bank expects to generate $220,000 in annual net income in the first year of operation, he said.