Credit to the Private Sector: Poor Outlook

Managers of Costa Rica's financial institutions predict that due to the health crisis the country is going through, the demand for credit from companies and families will continue to fall in the coming months.

Tuesday, April 21, 2020

Figures from the Central Bank of Costa Rica state that between March 2019 and the same month in 2020, the balance of money lent by public and private banks to companies and families decreased by 2.3%, from $28,559 million to $27,908 million. See full data (in Spanish).

For Allan Calderon, the National Bank's Credit and Risk manager, the outlook is that "... the demand for credit by businesses and families will continue to be weak as a result of the negative effects of the coronavirus on the economy."

You may be interested in "Covid-19: Outlook for the Financial Sector"

Regarding the expected trends, Ariel Rosenblatt, Scotiabank's vice president, explained to Nacion.com that "... the covid-19 stopped all the demand that the entity was reporting in the retail and commercial sector. Companies and families are readjusting to a new reality and, until the new variables are internalized, we will not see growth in demand for credit."

Also see "Changes in Lifestyle and the New Commercial Reality"

According to the interactive report prepared by CentralAmericaData, it is predicted that the impact of the Covid-19 crisis on the financial sector in Central America will be felt mainly in services related to stock brokerage and investment advice, where a drop is expected.

Banking sector and covid-19: How to measure the impact on the various sectors?

We prepared for our clients the report "Information System: Covid-19 and Business Outlook" which helps companies to measure the impact that the crisis will have on their activity in the coming months and which opportunities will arise in the context of the new commercial reality.

Click here to request access to this report.

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April 2020

Once the local economy begins to return to normal, as isolation and mobility restrictions are relaxed, it is estimated that Guatemalan households will have reduced their demand for car insurance by 7%.

Using a demand/income sensitivity model developed by the Trade Intelligence Unit of CentralAmericaData, it is possible to forecast the variations in demand by Guatemalan households for different goods and services as the most critical phases of the spread of the covid-19 are overcome and the measures restricting mobility in the country are lifted.

Tourism and Business Transformation

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New health and hygiene protocols in the establishments and the commitment to attract national tourists in an environment where short trips will be preferred, are some of the trends predicted in the new "normality" that will come after the quarantine period.

Given the quarantines decreed by most governments worldwide, it is anticipated that the habits of tourists will change dramatically in the short and medium term, as the crisis of covid-19 will leave consequences among consumers.

Loans in Panama: 90-day Moratorium

April 2020

In the third debate, the National Assembly approved a bill that grants debtors a 90-day extension of time for payment of credits granted by banking, cooperative and financial institutions.

According to the law that must be sanctioned or banned by President Cortizo, once the term of the moratorium set forth in this law has expired, creditors, in common agreement with the debtor, must agree on the conditions for the unpaid debt to be prorated, to be paid within 24 months.

Impact of the Crisis on the Banking Sector

March 2020

Increased demand for credit and more requests for loan restructuring is part of what the covid-19 crisis has brought to Guatemala's banking sector.

According to representatives of the Guatemalan Banking Association (ABG), the spread of covid-19 and the restrictive measures that have been decreed in the country are affecting the liquidity of companies, many of which have no income and must use credit to pay their bills.

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