Private Sector Credit is Slowing Down

Up to February 2018, the growth rate of bank loans for trade, services, consumption and housing activities decreased considerably compared to the same period last year.

Wednesday, June 6, 2018

According to figures from the Central Bank of Costa Rica, between February 2017 and the same month of this year, the annual growth rate of credit granted by the financial system to the private sector fell from 13% to 7%. 

When reviewing figures on the main economic activities, it can be seen that between the months in question, the speed with which financing to the private sector had been growing slowed significantly. For example, the growth rate of credit for commercial activities fell from 13% to 3% in the period in question, while that of credit for services decreased from 16% to 7%. Financing for consumer activities fell from 13% to 10%, and in the case of housing loans, the growth rate fell from 12% to 8%. 

In regards to this, Adriana Rodríguez, manager of Economic Studies at Scotiabank, explained to that " ...'Initially demand for housing and consumption was affected by the upward scenario in interest rates in dollars, whose main reference, the Federal Reserve rate, has experienced six increases of 25 basis points since the end of 2015 to date, and at least, one more increase has been estimated for this year."

For his part Alonso Elizondo, executive director of the Chamber of Commerce, explained that " ... the slowdown in credit is a phenomenon that has been occurring in recent months in a generalized way in the economy, where the trade sector is not the exception. "

See complete figures by the Central Bank of Costa Rica. (In Spanish)

Do you need information about the financial sector?

Request more information:

this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423

More on this topic

Bank Credit Slows down

May 2019

In recent months, the credit portfolio of public and private banks in Costa Rica has been growing at a slower rate, partly because of high levels of indebtedness of the population.

According to figures from the Central Bank of Costa Rica, between October 2018 and March 2019 the year-on-year growth of credit has generally slowed, since the increase in the portfolio of private banks fell from 14% to 12%, in public banks the decline was from 1.37% to 0.75%, and in the case of other financial intermediaries the decline was from 8.86% to 6.97%.

Private Credit Up 6% up to March 2018

June 2018

Mortgages and personal loans were largely responsible for the increase in domestic credit to the private sector, registered between March 2017 and the same month of 2018.

The most recent figures from the Superintendency of Banks reported that in the third month of the year the private sector's credit portfolio totaled $51.668 billion, which is equivalent to an increase of 6.2% compared to the $48.665 billion reported up to March 2017. 

Panama: Bank Credit Grew Very Little in 2017

March 2018

At the end of last year the banking system's loan portfolio ended up with a balance of $66,117 million, just 1.4% more than the $65,187 million reported at the end of 2016.

The Comptroller General of the Republic reported that the moderate increase is partly explained by a contraction recorded by the external sector's portfolio, as between 2016 and 2017 it dropped from $16,557 to $14,560, which is equivalent to a 12% drop.

Bank Credit Statistics in Costa Rica

February 2016

Up to December 2015 28% of the total banking portfolio was destined for consumption activities, 26% to the construction sector and 16% to service activities.

Financial Monitoring figures compiled by the Commercial Intelligence unit at CentralAmericaData com show that credit unions are the institutions who awarded the most loans of this type, with 29.8% of their total portfolio.