Development Banking Requirements Made More Flexible

The definition of the conditions and requirements for customers will be the responsibility of each entity, as determined in its policies and risk analysis.

Wednesday, April 17, 2013

The National Council of Financial System Supervision (CONASSIF) approved from Tuesday, 15 to 10 changes to the standard established by the Superintendent of Financial Institutions (SUGEF) under the Regulation for qualifying borrowers with resources granted by the Banking System Development Act 8634, which states: "It is the responsibility of the Board of Directors or equivalent governing body of each financial institution, to approve the policies, processes and controls which will be used to identify, measure and manage the risks associated with credit operations, and resources granted by the Banking System Development Act 8634 ".

Such policies, processes and controls should consider at least the characteristics of the line of business. The aforementioned amendment provides greater independence to financial operators in the definition of the requirements for granting a loan which falls under the category of Development Banking.



More on this topic

Central Bank Does Not Want to be Lender to SMEs

October 2012

The idea that the Central Bank of Costa Rica be a fund manager for the Development Bank has been rejected by its President Rodrigo Bolaños.

An article in Nacion.com notes that the strange idea originated in the office of the second vice president of Costa Rica, Luis Liberman, where it probably passed by the Economy Minister Mayi Antillon, who most likely presented it at the Development Bank Commission of the Legislature.

$10.5 million for Costa Rican SMEs

October 2011

The BCIE has granted a credit line to Cathay Bank to support MSME’s, as well as international trade and housing in Costa Rica.

A press release by the Central American Bank for Economic Integration (BCIE) reads:

The Central American Bank for Economic Integration (BCIE) has granted a loan to Banco Cathay allowing it to expand its global credit line to $10.5 million in order to support Micro, Small and Medium Enterprises (MSMEs) as well as international trade and housing Costa Rica.

Costa Rica: Development Banking Still Stuck

September 2011

The reform proposal submitted by the Government does not have the full backing of the Legislative Assembly.

The way that resources obtained from the banking system are to be used is the main point that could further delay the implementation of the system of development banking (SBD in Spanish), which aims to provide financing to small and medium enterprises who do not have access today to traditional bank loans.

Development Banking Ineffective in Costa Rica

June 2010

Millions of dollars earmarked for developing banking are standing idle in Costa Rica, because of legal, administrative and financial oversight problems.

The very laws that created these credit instruments are the reason of their lack of use. They end up not fulfilling their role of providing low cost financing for small and medium companies.

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