Despite measures taken by monetary authorities to keep the money market liquid in order to stimulate credit, financing to companies has not reactivated. Directors of the Industrial Bank and G&T Continental state that they are receiving up to 20% fewer loan requests.
SigloXXI.com reported in an article that "the executive director of G&T Continental, Federico Linares, agrees with the general manager of the Industrial Bank, Luis Lara, noting that the banking system has become cautious and strict with credit lines, but he says that this decline in lending is due to a seasonality that has been evident in recent years and that it manifests itself in the first four months of the year. However, he did not detail the reasons that mark this trend."
June shows 12-month growth in credit at 6.7%, below the 11.7% it had at the beginning of this year.
According to the president of the Chamber of Industry of Guatemala, Thomas Dougherty, uncertainty about the international economy and contingency plans brought about by companies are a few of the causes for the decrease in requests for lines of credit.
Since the fourth quarter of 2008, credit extended by banks has been declining consistently.
An analysis published by the Salvadoran Foundation for Economic and Social Development reads:
“This decline has various interpretations, from suggestions that it is the result of reduced demand due to the lack of investment opportunities, to the internationalized banking system’s lack of identification with the needs of local businesses. Regarding the first scenario, this is a very limited conclusion and the second case offers an interpretation that doesn’t have an economic foundation.
An analysis of the changes in the dynamics of granting credit, in an interview with the Superintendent of the Salvadorian Financial System.
Luis Armando Montenegro, Superintendent of the Financial System, in an interview published in La Prensa Gráfica, responds to questions about the liquidity of the Salvadorian financial system, the contraction of external credit to the local banking system, changes in the granting of loans, and interest rates, among other issues.
With sales plummeting 45% and lacking credit, some 500 micro, small and medium companies are under risk of closing.
José Fernández, president of Anmpih (Association of Micro, Small and Medium Insutrial companies), labeled the situation as "critical".
"This is a disaster, even companies from the service sector believe they won't get through next year, and some 500 micro companies are about to close due to lack of funds, as they don't even know how they'll pay the Christmas bonus", warned José Fernandez in a Laprensahn.com article.
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