In Costa Rica, the active participation of the government issuing debt in the local market and the uncertainty over fiscal reform are some of the reasons behind the sharp slowdown in growth of credit to the private sector.
Although awards of loans to the private sector are still growing, they is doing so at a slower pace.According to official figures between January and June of this year, the inter-annual growth rate of the total credit portfolio went from 9.25% to 3.08%, which is equivalent to a drop of six percentage points.
The entity is preparing, for the March 18, to place corporate debt at a 2 year term and a net rate of 5.25%, via auction on the National Stock Exchange.
From a statement issued by FCCA Investment Banking:
On Wednesday March 18 Banco Lafise Costa Rica a member of the prestigious Lafise Group with operations in Central America and the Caribbean, will auction on the National Stock Exchange 10-year bonds for $10 million, at a 5.25% rate, quarterly risk rating (SCR AA-) and (PCR AA).
Up to April 30, 2014 the number of cards in circulation amounted to 1,764,609, 2% more than at the end of January of the same year.
From a press release issued by the Ministry of Economy, Industry and Trade of Costa Rica:
According to data from the latest survey by the Directorate of Economic and Market Research of the Ministry of Economy, Industry and Commerce (MEIC), defaults decreased by 3%, corresponding to a delay of payment over 90 days, compared to the previous study.
The escalation and volatility of the dollar in recent days raised the spread over 3%.
The volatility that has been seen in the exchange rate in Costa Rica in recent days has increased the spread between buying and selling dollars at the counters of financial institutions.
"'Given the much more abrupt sudden movements (in the exchange rate), there is an increased likelihood that we'll buy cheap dollars and after a few hours we'll sell them expensively. In order to cover this risk, the differential is increased," said Bernardo Alfaro, deputy general manager of Finance and Risk at Banco Nacional.
Entrepreneurs in the finance sector and academics are preparing a proposal to regulate by law invoice discounting, an activity which keeps on growing.
The wording of this proposal has gained importance in recent days as the Legal Affairs Committee of the Legislature began a study of a factoring project dating from 2002.
In this regard Pedro Chaves, director of the Department of Commercial Law at the University of Costa Rica, told Nacion.com that “’All of it will have to be changed, that project is ten years old. The concept to factoring was completely different then. We can not start with such outdated legislation."
Getting cash by discounting accounts receivable is a form of credit which has increased by 160% in the past two years.
In April 2011 the 18 companies grouped under the Costa Rican Chamber of Factoring Companies managed a portfolio of $177 million, which is double the amount recorded in 2009. In June 2012, the business of factoring in Costa Rica amounted to about $220 million.
Interest rates fixed for 20 years being offered by banks are increasing the demand for mortgages.
Four banks are currently promoting mortgage loans with fixed interest rates.
Credit for housing rose by almost 6% from February 2010 to February 2011, an increase which could accelerate at the end of the year because of these programs.
Gabriela Mayorga in Elfinancierocr.com writes "The BCR has already managed to arrange loans (in less than two months), for a third of the total amount allocated to the fixed rate housing program, the bank said."
Bank Lafise offers a line of credit of up to $178,570 (¢100 million) per business.
Elfinancierocr.com publishes: "The line of credit is directed to PYMEs with total assets less than $2.5 million and with a maximum of 100 employees. Furthermore, it is targeted to financing the industrial, agriculture, and commerce and services sectors."