In 1990, the development bank Banrural stopped lending to poor farmers. The National Solidarity Program, Pronasol, then lent to them through Crédito a la Palabra, credit on one’s word. The loans required no traditional collateral and, according to the study, charged no interest. According to the government’s report of 1993, more than one million farmers received such credit.
A farmer who did not repay did not receive a new loan. The unpaid loan became a one-time subsidy.