Credit Continues to Drop in Guatemala

June shows 12-month growth in credit at 6.7%, below the 11.7% it had at the beginning of this year.

Friday, June 19, 2009

According to the president of the Chamber of Industry of Guatemala, Thomas Dougherty, uncertainty about the international economy and contingency plans brought about by companies are a few of the causes for the decrease in requests for lines of credit.
The website Siglo 21 states: “For some analysts, the rate of credit reflects the volatility of the economy, as evidenced by the demand for capital for business activities. According to the Central Bank, the variation of 6.7% is in the range which was estimated to reach a growth in GDP between 1% and 2%.”

More on this topic

Nicaragua: Bank Lending Continues to Fall

August 2011

During the first six months of the year reduction in the loan portfolio was $59 million.

Banks stricter attitudes to granting financing seem to be one of the main reasons behind the decrease in loan funding in recent months.

The reduction is striking especially at a time when the country's economic activity is vigorous, with a strengthened consumer sector explaining an important part of overall growth.

Salvadoran Banks: Few Loans, Excess Liquidity

March 2010

Banks have been very cautious when granting loans; as a result, their liquidity is 24.4% above the legal requirement.

Abansa, the country’s banking association, reported that in January the index measuring liquidity stood at 41.42%, more than in January 2009 (36.51%).

Economists and business leaders criticize banks for not lending these resources to the productive sectors of the country.

500 SMEs Under Threat

October 2009

With sales plummeting 45% and lacking credit, some 500 micro, small and medium companies are under risk of closing.

José Fernández, president of Anmpih (Association of Micro, Small and Medium Insutrial companies), labeled the situation as "critical".

"This is a disaster, even companies from the service sector believe they won't get through next year, and some 500 micro companies are about to close due to lack of funds, as they don't even know how they'll pay the Christmas bonus", warned José Fernandez in a article.

Credit for Private Sector Drops to 8.3% in Guatemala

April 2009

Up to and including April 9, the total growth (including loans in local and foreign currency) was 8.3%, the lowest in the last two years.

Despite measures taken by monetary authorities to keep the money market liquid in order to stimulate credit, financing to companies has not reactivated. Directors of the Industrial Bank and G&T Continental state that they are receiving up to 20% fewer loan requests.

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