Financial System: Warning by Bill

In the Honduran Congress there is a bill that seeks to prohibit banks and finance companies from capitalizing interest on payments not made from March 2020 to December 2021, a measure that worries the sector.

Friday, October 9, 2020

The initiative was sent by the Executive to the National Congress months ago. The purpose of the bill, which is called "Financial Plan of Solidarity Rescue", is to benefit people and companies that were affected by the spread of covid-19, with the payment of their debts.

At the end of August, President Juan Orlando Hernández, through an official statement, urged the National Congress to approve the bill as soon as possible.

See "Financial Services: Business Potential in Central America"

The initiative in the hands of the Legislative prohibits banks and financial institutions from capitalizing interest on payments not made from March 2020 to December 2021. For this same period, it also prevents the application of moratorium charges, for services or any other additional cost to the interest rate, including that of credit cards.

Laprensa.hn reviews that "... the proposal establishes maximum monthly rates of 2% for credit cards and 1% for loans granted by financial institutions (lowering the average rate from 30% to 12% per year), according to a presentation made by the Secretariat of State of the Presidency."

The article adds that "... economists and businessmen consider that the project would be going against the market economy and ask for prudence to avoid a systemic risk and urge to watch over the stability of the financial system, since the money they handle belongs to all savers."

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Financial Services in Latin America

December 2011

Economy and Development Report by CAF - Development Bank in Latin America -entitled Financial Services for development: promoting access in Latin America.

From the introduction of the first chapter of the report:

Access to financial services - Development and Welfare

Why could access to financial services be an important factor for economic development and welfare in Latin America? A first important aspect is that financial institutions have the mission to attract domestic savings, and possibly also those from external sources, to finance both working capital (liquidity needs) such as business investment (physical capital). Meanwhile, families also require credit to finance investment or expenditure needs (e.g. children's education or purchase of durable goods), whose timing may not coincide with the availability of current income or savings.

Guatemala: Small Store Banking on the Rise

January 2010

The number of basic banking services offered by local, small stores increased 27.6% when compared to 2008.

Currently there are 1.915 agencies offering basic transactions like cashing small checks and paying public services.

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