Analysis of the region's micro-financing industry in the past three years, plus the effects caused by local and global crisis in 2008.
A report by REDCAMIF (Central American Micro Financing Network), describes how the industry behaved since prosperous times, when high levels of growth were recorded throughout the region and institutions become more and more self sustainable, up to 2008, when the different international and domestic crisis impacted Central America's economies, its businessmen, its formal financing system and its micro-financing industry.
The benchmark interest rates were lowered by up to 3% for the different sectors.
Journalist Leticia Vindas wrote in the El Financiero website: "For those companies that need working capital for up to one year, the bank lowered the minimum benchmark interest rate, meaning that the total will now be the Base Passive Rate (TBP) +2%, where before it was over 5%. For companies that need financing for up to five years, the rate in colones went from TBP +5% to TBP +2.5%."
Honduras Central Bank President Edwin Araque said he favors keeping the benchmark lending rate unchanged throughout the year on optimism steps taken to limit an expansion in credit will help slow inflation.
The Tegucigalpa, Honduras-based Banco Central kept the benchmark rate at 7.75 percent on March 27 and asked commercial lenders to set aside more of their deposits at the bank. The higher reserve requirements are enough to help bring inflation within its official target for 2008, Araque said.
After more than two years of virtual immobility, the dollar started a rise which has been linked to changes in external variables, accompanied by a concentration of credit in the US currency.
Accompanying this depreciation of the local currency is an increase in the benchmark rate for dollars, a new indicator that the Central Bank started publishing a few weeks ago.
An editorial on Nación.com notes "...The new benchmark rate in foreign currency calculated weekly by the Central Bank has gone up.There has also been a slight rise in quotes of the colón against the dollar in the foreign exchange market.Could there be a relationship between the two movements? "
It is reported that the reason for the rate hike is"... in the opinion of those bankers who were surveyed ... the rise is due to a shortage , or perhaps less abundance, of dollars circulating in our environment. Closely linked to the lower liquidity is the high concentration of credit granted in that currency. "
For the fourth consecutive week the benchmark for interest rates in the country registered a decline, going from 6.55% to 6.50%.
The indicator calculated by the Central Bank of Costa Rica will remain at 6.50% until at least Wednesday September 9th. Since early this year, when it stood at 7.20% the rate has been declinging, consistent with the slowdown experienced by the economy.
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