Peru tightens lending rules for credit unions

The Superintendencia de Banca, Seguros y AFP (SBS) in Peru approved new rules for savings and credit cooperatives (Coopac) to prevent them from lending money to people who are already heavily in debt.

The regulations require cooperatives to assess a member’s total debt, including loans from other financial institutions, before approving new credit. This assessment must consider a member’s income, expenses, and any obligations related to their business or family.

The SBS aims to encourage responsible and sustainable lending practices by prioritizing borrowers’ ability to repay. Cooperatives will calculate a “capacity to pay” ratio, comparing a member’s financial obligations to their net available income, and should not extend credit if the ratio exceeds limits defined by the cooperative’s risk methodology. Beyond initial approval, cooperatives must also monitor members’ financial health to identify increasing debt.

If a member’s risk level rises, the cooperative can limit future credit, conduct more thorough evaluations, or increase monitoring. Different sized cooperatives have staggered deadlines to comply with the new rules, ranging from March 31, 2027, to March 31, 2028, based on their asset levels.