Three years after the epidemic began, the government created publicly guaranteed bank loans through the ICO to safeguard workers, small businesses, and the self-employed from the economic damage caused by the health crisis. By the end of March, defaults beyond 90 days were limited to 1.67 percent, or 2.35 billion euros, according to a report from the Official Credit Institute (ICO) that was obtained by EL PERIÓDICO DE CATALUNYA from the Prensa Ibérica group. This relief helped ensure that funding continued to reach the economy in the early stages of the coronavirus emergency, with the state covering a substantial portion of potential losses to keep credit flowing (Citation: ICO report).
This delayed activity involved roughly 39,800 operations and affected around 28,800 borrowers. The state committed to bearing up to 80 percent of losses for overdue loans by freelancers and small firms, and between 60 and 70 percent on bad loans for larger companies. The total amount paid out corresponded to the guaranteed portion of installments that remained unpaid, not the entire loan principal, allowing customers the possibility of resuming payments later (Citation: ICO report).
Among the 39,800 delayed transactions, 1,192,484 were granted, with 674,922 beneficiaries. Of these, 140,737 million euros were used for purchases, with 107,187 million euros guaranteed. The unpaid transactions accounted for 3.33 percent of the total and exceeded the outstanding amount of 1.67 percent. Most cases involved smaller loan amounts, typically used by freelancers and small and medium-sized enterprises, which faced more difficulty meeting payments. Nonetheless, the data remain limited regarding what was anticipated three years ago, and there was no significant rise in defaults by the end of June as the grace period for most operations benefiting from the moratorium continued (Citation: ICO report).
Differences with the Bank of Spain
The ICO figures, expected to grow in coming quarters, differ from the Bank of Spain due to methodology. The ICO uses the maximum loan amount as a reference, aiming to present a realistic view of the portfolio. This portfolio has ceased to add new entrants as the collateral requirement period ended in June of the previous year, and depreciation has reduced the portfolio primarily for the most trusted borrowers. Overdue loans tend to stay in the portfolio, reflecting continuing payment difficulties or greater risk, while the outstanding balance evolves with new data. The ICO focuses on outstanding loans, since those are the ones driving payments to banks (Citation: ICO report).
By contrast, the Bank of Spain uses the last outstanding balance of loans drawn, even when some approved funds were not ultimately needed by companies. It also calculates the doubt rate, which includes loans that are unpaid and those in subjective doubt, meaning they are current but potentially unlikely to endure. This distinction matters for the supervisory body and for public credit accounts, while banks and the broader financial system rely on stability (Citation: Bank of Spain methodology note).
Latest figures show that the balance of regulated ICO credit dropped to 79.212 billion euros at year-end, down 11.3 percent from 2021. Within this total, the rate of questionable collection stood at 7.1 percent, up 5.633 billion euros but increasing in a controlled way. Specifically, 2.905 million were marked as doubt and 2.728 million as subjective suspicion. Unpaid private surveillance loans accounted for 19.6 percent, while 73.3 percent showed no major problems (Citation: Bank of Spain data).
In the Bank of Spain’s terms, 7.1 percent were classified as doubtful, and 6.3 percent as doubtful across general banking, with 3.55 percent for overall bank doubtful and 4.2 percent for business doubtful from December. The agency notes that the ICO guarantee program targeted companies weakened by the 2020-2021 health crisis, and that some sectors would naturally be more affected by the downturn. A historical high of 13.61 percent of suspicious general banking was reached in 2013, with notable concentration among construction and development firms after the housing bubble burst (Citation: Bank of Spain stability report).
In March 2020, the government established two guarantee lines totaling 140 billion euros to support liquidity, working capital, and investment. This move aimed to prevent the collapse of productive activity and mass unemployment during lockdown. Nearly all operations involved freelancers and SMEs, with 73.5 percent dedicated to self-employed individuals and micro-enterprises with fewer than ten employees (Citation: ICO report).
Catalonia led in volume, recording 238,016 credits for 134,260 businesses and freelancers, representing 26.507 billion euros with 20.352 billion guaranteed. The Community of Madrid followed with 28.486 billion euros in financing, reflecting a higher concentration of larger firms. The sectors most supported included tourism, culture, entertainment, construction and infrastructure, professional and administrative services, consumer goods and retail, equipment and industrial products, and food distribution (Citation: ICO report).
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