The Number of Electronic Credit Invoices Grew 43% in the First Half of the Year

The use of the Electronic Credit Invoice (Factura de Crédito Electrónica, FCE) is growing steadily in the local market and starts to consolidate itself as a dynamic and agile financing alternative for micro-, small- and medium-sized enterprises (MSMEs). Since the BCRA implemented the system for the open transfer (sistema de circulación abierta, SCA) in April 2021, this instrument has gained volume systematically. In June, almost 110,000 invoices were issued for an amount of ARS305 trillion.

Thus, in the first half of the year, 659,752 MSMEs’ electronic credit invoices (facturas de crédito electrónicas MiPyMEs, FCEMs) in pesos entered the SCA, increasing 42.7% against the same period of 2022 (462,321 invoices). The data arise from the latest Monthly Report on Retail Payments released by the BCRA, showing a growing trend of this financing instrument, which mainly contributes to financing small companies.

MSMEs are a key component of a country’s productive scheme and major players for economic growth. In Argentina, there are more than 600,000 employing private companies, 83% of which are micro enterprises, 16.8% are small and medium-sized companies, and only 0.2% are big companies. Access to financing is one of the challenges that MSMEs face at a global level.

The FCEM is an innovative instrument that allows commercial debts to turn into financial debts. It is aimed at boosting the financing capacity of MSMEs by sending an invoice to the capital market and, since the implementation of the SCA, to the interbank system.

Like the procedure for an electronic check (Cheque Electrónico, ECHEQ), the SCA will enable MSME suppliers of large companies to draw on a greater number of financing sources as well as ensure the collection of FCEMs through automatic credit in the MSME registered account. Any default will be recorded in the Database of MSMEs’ Electronic Invoices Not Paid Upon Maturity (Central de Facturas Electrónicas MiPyME Impagas al Vencimiento, CenFIV).

It should also be noted that the CenFIV was implemented last November. It was a key step towards the consolidation of FCEs as a financing instrument for MSMEs since the CenFIV endows FCEMs with transparency and creates a credit record, which further improves traceability.

Moreover, it displays the payment behavior of large companies through several indexes, providing greater certainty about the payment of FCEMs issued by MSME suppliers of large companies.

The SCA regulation also provides that, at the MSMEs' request, receipts may be issued for companies to be able to bring legal actions in case of overdue electronic invoices. In addition, FCEMs will be free of charge; hence, financial institutions will not be allowed to impose any charges.

Since its implementation, the BCRA, the Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos, AFIP), and the Secretariat of MSMEs have adopted several measures. These measures helped to make the instrument more useful for it to become a genuine source of financing for MSMEs.

In October 2020, for example, credit invoices started to be managed directly from the financial institutions’ portals and apps, similarly to electronic checks. Thus, each electronic credit invoice will be available through online banking immediately upon acceptance (whether express or implied after 21 days) so that MSMEs may discount it at banks or non-financial credit providers, forward it for trading in markets regulated by the National Securities Commission, or submit it for collection upon due date through a financial institution.

In February 2021, the Board of the BCRA established the SCA. This measure streamlined the transfer of FCEMs, as only 1% of them was in circulation until then.

In addition, the BCRA has set incentives to improve the performance of this instrument by lowering the minimum cash requirements of those financial institutions that acquire FCEMs.

Finally, in January 2023, the BCRA created the Registry of Platforms for MSME Financing, which offers added value to FCEM operations. These platforms are the most used means for MSMEs to discount their electronic invoices.

By adopting these measures, the BCRA seeks to expand the financing alternatives for MSMEs and, in particular, to streamline and increase the use of FCEMs through a straightforward operation for MSMEs’ daily management.

August 3, 2023

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