In Depth Review of Credit in Panama

One third of Panamanians have on average three loans, and they make payments on them with an acceptable default rate.

Monday, August 26, 2013

About 1.2 million Panamanians have loans, of which 85% are employees.

According to Luz María Salamina, general manager of the Panamanian Credit Association (CPA), "... each one of those people involved is granted an average of three loans, which makes Panama one of the most bankerized economies in the region. "

"Credit in Panama is one of the main reflections of the quality of life of people and many international organizations view the country as an example for others to emulate," she added.

Of the 3.6 million loans, 64% are offered by the financial sector, and 36% by the commercial sector. According to the CPA, the loans with the greatest amount of defaults in payments are those for less than $1,000.

According to Salamis, defaulting "is the rule for how the system grows. There will always be a group that is riskier. The important thing is to identify it and take steps to manage it "

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The Role of Credit in the Construction Sector

September 2013

In Panama housing loans total $1.121 billion, infrastructure loans $668.5 million and commercial construction loans $466 million.

Added to these is $841 million for additions and remodeling. The figures were revealed by the Superintendency of Banks in Panama (SBP).

Credit has become the key to growth of the construction industry and property development in the country.

Trade Credit Grows By 37% in Panama

September 2013

In July 2013 the balance on the loan portfolio to the commercial sector was $9,940 million, while in the same month of 2012 it was $7.236 million.

The figures were released by the Panamanian Credit Association. "As of June this year a total of 73,172 active commercial loans was reported, which means an increase of 30.5% compared to the same period in 2012 when there were only about 56,055," reported an article in Panamaamerica.com.pa.

Increased Number of Credit Cards in Panama

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In late May there were 673,590 active credit cards, while in the same period in 2012 there were 609,357.

The balance of active cards also showed an increase of 17% compared with May 2012, according to a Panamanian Credit Association (CPA). "The balance went from $1.1114 billion to $1.3008 billion in May 2013, which represents 3.8% of total credit balances reported in the database", reported Elsiglo.com.

Auto Credit Up 17%

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Analysis has been conducted on the composition of the loan portfolio to buy vehicles, one of the fastest growing sectors in recent years.

In the past five years, auto financing in Panama has been increasing, in February Panamanian banks provided loans of this type worth $813 million.

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