Optimism for New Financial Leasing Law

Currently, financial leasing operations in Guatemala amount to $1,290 million, but with the approval of the new legal framework the portfolio could increase in the medium term between $1,677 million and $1,935 million.

Tuesday, February 16, 2021

With 101 votes in favor, the Plenary of the Congress of the Republic approved Decree 2-2021, Leasing Law, which regulates leasing with purchase option in the Guatemalan legislation. The legislative endorsement took place in the first days of February 2021.

According to experts on the subject, the legal and accounting certainty in the leasing contracts signed under the terms of the new law is a factor that will boost the growth of this type of operations.

You may be interested in "Financial services: Business potential in Central America".

Fernando Basterrechea, president of Gremial de Leasing, explained to Prensalibre.com that "...  'with the certainty of the law, leasing business operations can increase between 30% to 50%, especially for SMEs, and the reason is that it provides security for banks to recover assets, and for entrepreneurs to be able to acquire assets with which they can pay installments and not cash."

Hermann Giron of the CFG, stated that "... there are financing entities, local and international capital, interested in serving this market, which will bring more product options and greater competition to the financial sector and users will have more options."

The new leasing law establishes the regulatory framework to provide legal certainty to the leasing of real estate, machinery, equipment and vehicles. The legal figure applies to both companies and individuals.

The figure contemplates the person who owns the property, called the lessor, and the person who will use the property, called the lessee, in exchange for the payment of a monthly fee.

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More on this topic

Guatemala: Endorsement of Financial Leasing Regulation

February 2021

The Congress approved by articles and final wording the Leasing Law, a legal framework that establishes mechanisms for people to lease with option to purchase.

With 101 votes in favor, the Plenary of the Congress of the Republic approved Decree 2-2021, Leasing Law, which regulates leasing with option to purchase in the Guatemalan legislation, informed the legislative body.

Pressure to Pass Financial Leasing Law

May 2019

In Guatemala, companies report to have lost several credit opportunities because the bill presented to Congress in 2015 has not yet been approved.

The bill that is being analyzed in Congress and is in third reading since May 2016, establishes the legal framework for entities such as banks and financial companies to include leasing in their product portfolios.

New Law for Financial System in Guatemala

September 2016

Details of the draft law with which the Bank of Guatemala aims to improve regulation and supervision of the financial system.

From a statement issued by the Bank of Guatemala:

The bill submitted by the Monetary Board of the Executive Agency and by the President of the Republic to the Congress of the Republic on September 12 2016, introduces necessary reforms to Decree No. 19-2002, Law on Banks and Financial Groups, to modernize existing legislation and improve protection of depositors. The bill is based on the following aspects:   

Guatemala: Law on Financial Leasing

April 2016

A bill is being discussed in Congress which establishes a legal framework so that banks and financial institutions can include leasing in their product portfolios.

From a statement issued by the Congress of Guatemala:

Members of the Legislative Commission on Economy and Foreign Trade, chaired by Deputy Aristides Crespo Villegas, met today with the goal of favorably ruling on bill 4896, which includes providing legal certainty and regulating leasing activities in the country, known as the "Leasing Act".

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