Financial Sector: What are the Challenges for 2021?

For 2021, some of the financial institutions competing in the Costa Rican market are betting on placing loans for the purchase of homes, consumer loans and business financing.

Monday, February 1, 2021

In Costa Rica, home purchase loans were already showing positive signs at the end of 2020, since in November of last year the amount of the loan portfolio in question reported a 7% year-on-year increase.

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In this context competitors such as Banco de Costa Rica, during the first four months of the year plan to execute campaigns focused on stimulating credit for housing, consumption and loans for small and medium enterprises.

Scotiabank is another competitor that already has plans for this year. Maria Jose Acuna, senior manager of retail credit products, told Elfinancierocr.com that the entity "... plans to enable attractive conditions for housing credit for the remainder of the first quarter of 2021."

The current market situation presents attractive opportunities to invest in the real estate sector, therefore, Scotiabank decided to adjust its offer to the new conditions to favor customers, Acuna explained.

Because housing loans maintain the priority of payment by customers compared to consumer loans, banks are interested in marketing financial services for the purchase of houses or apartments.

See "What Financial Services Do Consumers Demand?"

According to Joaquin Vargas Zamora, deputy business manager of Grupo Mutual, for 2021 they have set out "... to maintain a balance in the credit portfolio by attending to the needs of the different customer segments and sectors, whether in personal or business banking. We will keep our personal and consumer credit lines open, all within the framework of adequate risk management."

Studies conducted by CentralAmericaData show that between July and October 2020, the number of Costa Rican consumers who expressed their interest in accessing a mortgage refinancing service online increased by 59%. In the case of the number of people in the country exploring options to opt for a commercial loan increased by 38% for the months in question.

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Setting a maximum usury rate and preventing clients from getting into debt to the extent of reducing their income below the minimum wage line are some of the changes that have arisen due to the application of the new law that has been in force since June 20.

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