Costa Rica: Increased Preference for Loans in Colones

In January 2011, indebtedness in Colones was 59% of total loans, compared to less than 50% in 2009.

Wednesday, March 9, 2011

The low Dollar value and relatively low rates in Colones encourage borrowing in national currency.

Gerardo Corrales, manager of BAC San José, told Nacion.com, "... the decision to take a debt in Colones or Dollars, besides interest rates depends on customer expectations of devaluation or appreciation of a currency against the other."

More on this topic

Bank Credit Statistics in Costa Rica

February 2016

Up to December 2015 28% of the total banking portfolio was destined for consumption activities, 26% to the construction sector and 16% to service activities.

Financial Monitoring figures compiled by the Commercial Intelligence unit at CentralAmericaData com show that credit unions are the institutions who awarded the most loans of this type, with 29.8% of their total portfolio.

Costa Rica: Bank Lending Slows

August 2014

The scare liquidity of colones explains the lower growth of loans in this currency, while credit growth in dollars continues to lose strength.

Added to the diminished liquidity in colones putting downward pressure on credit growth in that currency, is uncertainty at enterprise-level over recent changes in the exchange rate and lower credit demand for real estate projects, power generation and tourism, as explained by bankers to Nacion.com.

Costa Rica: Private Sector Credit Grows By 14%

June 2014

In the last twelve months the loan portfolio grew by 12.7% in dollars and 15.6% in colones.

The portfolio of loans granted by financial institutions to the private sector continues to grow while at the same time interest rates are increasing in both dollars and colones in the local financial system.

Costa Rica de-dollarizes

May 2011

High interest rates in colones and the dollar’s loss of value the against the colon accounts for the de-dollarization of Costa Rican’s savings.

The tendency to save in dollars that prevailed in the country for years is slowly disappearing, driven by the sharp devaluation of the U.S. currency which in recent months has not moved away from the lower band limit of 500 colones per dollar .

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