El Salvador: Credit Portfolio Shrinks 6.3%

During 2009, the banks’ credit portfolio lost $583.5 million; it is the first reduction in 5 years.

Wednesday, February 3, 2010

By the end of 2009, banks had $8.6 billion in loans, down from $9.2 billion at the end of 2008.

“Armando Arias, president of the Salvadoran Banking Association (ABANSA), explained that the contraction is relative higher than the performance of the economy, which shrank 3.3%”, reported Laprensagrafica.com.

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More on this topic

Less Demand for Loans in El Salvador

September 2010

Demand for credit is not growing as expected, as there are fewer investments in the country.

According to Roberto Orellana Milla, CEO of Banco Agrícola, "demand for credit has dropped 4%".

Elsalvador.com published more statements by Orellana: "Although we are in the midst of a slight economic recovery, we are still being affected by the 2009 crisis, and uncertainty and insecurity are contributing factors for the little demand for credit, 'because the crisis has affected a lot of companies and individuals'".

Fewer Loans to Private Sector in El Salvador

April 2010

At the end of February the loan portfolio of Salvadoran banks was 4.6% smaller than the same month of 2009.

In February 2010 banks had a combined loan portfolio of $8.09 billion, down from $8.47 billion in February 2009.

Claudio de Rosa is the former CEO of ABANSA, the Association of Salvadoran Banks.

Credit Drops 6.5% in El Salvador

October 2009

Approved loans fell 6.5% in the past 12 months (August 08 - August 09); loans for the productive sector where the most affected.

Experts agree in blaming the global economic crisis for this reduction in credit.

The President of the Central Bank explained that "...banks just reflects 'the economic deceleration' ...

Warning about credit restriction in El Salvador

September 2008

The export and industrial sector in the country has indicated that market conditions have worsened.

"We are now feeling a reduction in credit access, with the consolidation of the banks there is now a restrictive policy, and the international financial crisis is causing more credit to be closed due to the demand for capital in other markets," Jorge Arriaza, executive director of the Salvadoran Industrial Associacion (ASI), manifested.

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