Costa Rica: Unregulated Growth in Microcredit

The number of companies providing quick loans at high interest rates to people who are not eligible for credit in the financial system has increased.

Monday, July 13, 2015

The market segment that caters to people who are not eligible for credit in the formal financial system has grown in recent years. One example is Instacredit, whose loan portfolio balance has increased at a rate of 25% a year since 2010, according to Nacion.com.
These companies, which operate outside the formal financial regulation system, loan small amounts at interest rates which are higher than those at banks and regulated financial companies.

Fernando Muñoz, general manager of Prestamás, told Nacion.com that "... an average yearly growth has been maintained of between 7% and 9% in its loan portfolio since 2010, the same behavior has been seen in the increase of their clientele. "

Besides Prestamás and Instacredit, it is reported that there are other companies who advertise and manage microloans via the internet.

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More on this topic

Nicaragua: Recovery in Microfinance

June 2015

Nearly three years after the crisis caused by the No Pago movement, the sector is growing at an annual rate of 12%, driven by traditional credit, micro-insurance, and health services.

The microfinance sector is beginning its gradual and cautious return to agriculture, the sector most affected by the No Payment Movement, and is taking risks in projects by small agritourism farms.

Microfinance Continues to Improve in Nicaragua

December 2014

So far this year microfinancers have provided loans totaling $197 million, above the $184 million lent at the end of 2013.

Microfinance companies expect to close 2014 with a loan portfolio of approximately $206 million, representing an increase of 11.5% and 4% increase in the number of clients served, compared to last year.

In Guatemala, Microcredit Grows by 30%

August 2012

In the period July 2011 to the same month in 2012, the Guatemalan microfinance portfolio increased from $246 million to $320 million.

The downward trend observed by microcredit in 2008 and 2009 after the global financial crisis, has reversed; from July 2010 to July 2011 the portfolio increased by 11.8%, and from July 2011 to July 2012 the increase was 30.4%.

Nicaragua: Microfinance Sector Facing Increasing Challenges

September 2009

The Fitch report notes that the negative effects of the global crisis have intensified in Nicaragua.

Fitch Ratings – San Salvador/San José, September 24, 2009. The risks faced by microfinance institutions worldwide have aggravated over the past year. The lesser favorable economic conditions have deeply impacted the populational sectors in developing countries that have managed to overcome poverty and compose an important segment of microfinance institutions.

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