An extension has been given to the deadline to make payments without affecting credit ratings and there are more flexible requirements for loans up to $350,000, both part of the changes approved by the Central Bank.
Companies in the sector are warning of over-indebtedness in some areas of the country and are asking for adjustments to the rules that regulate the activity.
At the end of the first quarter of 2014, the country has a total of 1,708 outstanding microloans, with a total balance of $774,000 and having a default rate of 1.84%, according to data from the Bank of Guatemala (BANGUAT). Given this scenario, the debt overhang presented in some regions and the plans for a new draft law regulating them is a concern in the industry.
50% of all loans granted by financing companies are in a state of default.
This was stated by Alicia Sáenz de Guinard, president of the National Association of Financing Companies. She added that 20% of the debtors are individuals who paid via direct deduction from their salaries.
From January 2008 to January 2009, the banking system’s unrecoverable portfolio grew by 36.9%.
The portfolio with the riskiest loans, known as "E" and classified as "irrecoverable," reached $246 million in January 2009, while $179.7 million were recorded in January 2008, a variation of $66.3 million.
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