Salvadoran Banks carefully analyze new credits

Salvadoran banks have started to restrict the granting of credit in order to avoid a liquidity crisis.

Tuesday, November 4, 2008

Various banks in the system "are being much more prudent and more cautious in their credit analysis," said the president of the Salvadoran Banking Association (Abansa), Armando Arias.

He said that the crisis will have an impact on El Salvador, but it will be the reduction in remittance that will have a ripple effect.

Another reason for the impact is that "access to international financing is now more restricted" and because the cost of money obtained abroad has gotten more expensive, he explained.

More on this topic

Private Banks Asked to Remove Credit Restrictions

June 2013

The sector's growth has been hampered by the ceilings imposed by the Central Bank of Costa Rica on the growth of the credit portfolio.

The BCCR last February set a limit on growth of 12% for the private financial sector, in order to remove excess colones that had to be used to maintain the status of the dollar.

Honduras: Credit Stagnant due to Over-Regulation

May 2011

The high reserve requirements and government regulation are preventing the growth of private sector credit.

While the coffers of the banks are filled with notes due to growth in deposits and liquidity in the economy, the country's productive sector can not find adequate financing to boost growth.

Salvadoran Banks Have $800 Million to Lend

April 2010

Banks in El Salvador remarked they have resources to boost the country’s economic recovery and lend them to companies.

Armando Arias, president of the Salvadoran Banking Association (ABANSA), explained they now have enough liquidity to assist the country in its economic recovery, thanks to being very cautious during the crisis.

Fewer Loans to Private Sector in El Salvador

April 2010

At the end of February the loan portfolio of Salvadoran banks was 4.6% smaller than the same month of 2009.

In February 2010 banks had a combined loan portfolio of $8.09 billion, down from $8.47 billion in February 2009.

Claudio de Rosa is the former CEO of ABANSA, the Association of Salvadoran Banks.

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