Bank Credit Slows down

In recent months, the credit portfolio of public and private banks in Costa Rica has been growing at a slower rate, partly because of high levels of indebtedness of the population.

Tuesday, May 7, 2019

According to figures from the Central Bank of Costa Rica, between October 2018 and March 2019 the year-on-year growth of credit has generally slowed, since the increase in the portfolio of private banks fell from 14% to 12%, in public banks the decline was from 1.37% to 0.75%, and in the case of other financial intermediaries the decline was from 8.86% to 6.97%.

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Mauricio Hernández, director of private banking at Banco Prival, explained to that "... individuals and families are too indebted, which leaves no room for new commitments. This is evidenced in the increase in delinquencies in some lines of credit, such as consumption.

Regarding the non-payment of credits in the country, days ago it was reported that the low economic activity and the growth of unemployment explain the 25% increase reported between February 2018 and the same month of 2019 in the value of assets acquired by banks to recover credits.

See "Unpaid Bank Loans Increase"

Hernandez added that "... Despite the fact that the local economic and fiscal outlook has improved compared to last year, consumer and producer confidence are still not high enough to allow local private credit to take off.

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