Chile implements Consolidated Debt Registry to impact SME financing

Chile has implemented the Consolidated Debt Registry (Redec), a system managed by the Financial Market Commission (CMF) that centralizes debt information from over 150 entities, including banks and cooperatives. Under Law No. 21,680, the registry provides a unified view of an individual's or company's credit history, which is expected to impact how small and medium-sized enterprises (SMEs) access financing.

By providing transparency, the registry aims to reduce credit rejection rates for businesses with good histories and allow financial institutions to conduct more accurate evaluations. This comes at a time when delinquency remains a concern; data from Equifax Chile indicated that as of late March, 248,000 businesses had unpaid debts, many with arrears exceeding two years. The system prevents the previous practice where SMEs could obtain financing from multiple entities without any single institution having visibility into their total financial situation.