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15% return?
Nov
20
2011
hello everyone
when i was in otavalo recently i couldnt help but notice that there are numerous cooperativos de ahorro y credito that are offering up tp 15% return on deposits..this money is being lent back out to the indigenous people at a higher rate to hopefully finance their income producing activities..does anybody have any experience with these scenarios?..is it financial exploitation?..is the SBS keeping a close eye on this?..what are the default rates and what would be the depositors risk here?? thanks in advance for any insight…this is by far the most informative forum ive found on ecuador
Answer #2
BB;
As with any investment that sounds good, it needs to be checked out thoroughly. The laws in Ecuador are different than you might be used to as well. I do not know of any type of agency that guarantees or even reports on investment opps offered through financial institutions. That does not mean one does not exist though. Sorry if I couldnt be more help.
Larryp
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Answer #1
Hi bb, there is a law in Ecuador establishing a ceiling on legal interest rates.
These agencies serve like credit unions back in the states and loan at very high rates, often around 20% APR. and offer to investors interest rates just under that, there is a bit more of risk here, as the interest rate reflects… so I wouldnt invest your whole nest egg in one of these but its worth a long look.
Dom