Banking Business in Red Numbers

Between March 2018 and September 2019, the number of loans granted in Nicaragua by the banking sector has been reduced by around 540,000, a drop attributed to the economic crisis the country is going through.

Tuesday, November 26, 2019

Data from the Superintendence of Banks and Other Financial Institutions (Siboif), say that in March last year, the month before the onset of the crisis, 1.8 million loans were reported, and in September 2019 the figure fell to 1.26 million.

See "One year in crisis"

Roger Arteaga, an economist, explained to Laprensa.com.ni that "... it will be very difficult for credit to recover to the levels it had before the crisis started, because it is a business of trust, which has come to the detriment of the episodes of violence generated by the regime of Daniel Ortega and Rosario Murillo."

Arteaga added that "... It is difficult to recover to the previous levels, even companies are leaving the country and without credit cannot operate companies, without operation of companies there is no production, increases unemployment and that deepens the recession. In addition, the government introduced a tax reform and Social Security reform."

Also see "Investment in Nicaragua: Is it Possible to Restore Confidence?"

The portfolios that have been reduced the most are those of the industrial sector, vehicles, personal consumption, livestock and commercial.

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More on this topic

El Salvador: Loan Portfolio Downwards

August 2020

Given the outbreak of covid-19 and the imposition of restrictions on economic activity, between February and June of this year the amount of loans granted by the banking sector reported a 1.2% drop.

Data from the Superintendence of the Financial System (SSF) indicate that between February (the month before the beginning of the health and economic crisis) and June of this year, the credit portfolio contracted by $149 million, from $13.276 million to $13.127 million.

Credits in Nicaragua: Crisis on the Rise

May 2020

Given the political and economic crisis affecting the country since April 2018, a scenario that has combined with the crisis of covid-19, the loan portfolio increased from $5,172 million in March 2018 to $3,404 million at the end of April 2020.

According to figures of the Superintendence of Banks and Other Financial Institutions (Siboif), in the first four months of the year a decrease in the credit portfolio is also reflected, since it went from $3.578 million reported at the closing of 2019 to $3.404 million recorded in April 2020, representing -5% variation for the four-month period in question.

Banks: Liquidity Surplus in Nicaragua

June 2019

Because of decreasing demand for credit since April last year, banks in the Nicaraguan plaza are filling up with money they can not place in the market.

According to estimates by the Nicaraguan Foundation for Economic and Social Development (Funides) based on official figures, so far this crisis has boosted the liquidity of banks, increasing the proportion of available money that financial institutions have with respect to their obligations to the public, going from 31.76% reported in March 2018 to 46.73% recorded in May this year.

Crisis is Reflected in the Financial Sector

March 2019

Since the political and economic crisis began in Nicaragua, credit placement has fallen, while delinquency and loan restructuring have increased.

Data from the Superintendence of Banks and Other Financial Institutions (Siboif) indicate that between April 2018 and February 2019, a period during which the political crisis in the country has deepened, the fall in the net credit portfolio was 16%.

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