At the close of 2016, there were 24 companies dedicated to providing factoring services, with a portfolio of $243 million, 6% below the balance of 2014 but 2% higher than the amount recorded in 2015.
The companies with the most experience in the business of factoring or invoice discounting in the country pointed to an increase in the presence of individuals or small private companies that provide the same service but with fewer requirements and a higher level of risk, which has affected the overall performance of the sector.Among the companies affiliated with the Costa Rican Chamber of factoring companies are banks, financial institutions and companies dedicated exclusively to the service of factoring.
After closing 2016 with a 37% drop in profits, financial companies expect to achieve better results diversifying their services in an increasingly competitive market.
The total profits generated by financial companies in 2016 barely exceeded $2.4 million, a decrease of 37% compared to earnings in 2015.This year companies in the sector projected better results, some on them betting on the SME segment, some focusing on generating new business in the construction sector and others expanding their offering of services.
The government and the private sector are working on a plan to renew the business model for the financial center, developing specialized services for different market niches.
A working group consisting of representatives from government, regulators and the private sector are making an assessment of the financial services platform operating in the country in order to redefine their objectives using the example of best practices in similar jurisdictions which are more developed and adapted to international regulation.
Regardless of who is right about the motives, the resignations from an international committee set up to review practices in Panama's financial industry, and the ensuing squabbling, has only aggravated the bad perception of these practices.
The presence of the Nobel laureate Joseph Stiglitz and the notorious Swiss criminologist Mark Pieth along with Panamanian and regional personalities, in a commission to review the practices of the local financial industry, had the obvious good intention of communicating to the world Panama's also good intentions of reversing the country's image as a tax haven.
The market regulator is preparing rules for a new type of short-term investment fund, which will be available before July.
The Superintendency of Securities (Sugeval) in Costa Rica announced that it will add to its portfolio an investment fund focused on very short term securities which are low risk and high liquidity, reported El financierocr.com. This new instrument will be approved in the first half of 2016.
On the same day of its entry into force, the employers' union filed a constitutional motion against it, arguing that it adversely affects the freedom of the financial market.
For the second time a motion has been filed to temporarily suspend the enforcement of the law, with arguments once again made that the relevant processes were not followed and that its application will have adverse effects on the Guatemalan financial market.
A missed deadline has been missed on an issue of $4 million that was part of the restructuring of bond issues and securities made by the financial company La Generosa.
The restructuring of the financial company managed by businessman Jose Luis Ford failed to materialize and now the holders of bonds and securities issued by financial La Generosa will have to wait for the settlement of guarantees administered in a trust before they can recoup their investment.
The end of the movie is uncertain for buyers of apartments, financial institutions, suppliers and investors, who are the creditors of more than $65 million in the tourist and residential resort in Panama.
Although the Panamanian real estate market had already been noticed for the relative ease with which developers fail to fulfill their promises, the RG Hotels case demonstrates the urgent need to strengthen due diligence prior to any investment in this sector.
In order to prevent a repetition of cases such as that of Financial Pacific, the Superintendency of Securities is preparing legislation which incorporates an obligation to comply with good corporate governance practices.
Although details of the proposal have not yet been released, the Superintendence authorities indicated that "... it is related to general corporate governance recommendations, such as having an audit committee, a risk committee, having an independent director, among other things.
With an initial capital of $5 million a company called Confianza-SA-FGR has started operating and will focus on the management of funds for the issuance of guarantees for loans.
Confianza-SA-FGR's main objective is the management of funds for the issuance of guarantees to back loans mainly for small and medium enterprises in agricultural, vocational technical education, and social housing projects.
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