Between July and October 2020, the number of people in El Salvador exploring mortgage options online increased by 18%, and the number of Costa Rican consumers looking to buy credit cards decreased by 60%.
CentralAmericaData's interactive platform Consumer Insights monitors in real time the changes in consumer habits in all markets in the region and in other Latin American countries, with fundamental information to understand their behavior, new trends and anticipate eventual changes in their purchase patterns.
In the Honduran Congress there is a bill that seeks to prohibit banks and finance companies from capitalizing interest on payments not made from March 2020 to December 2021, a measure that worries the sector.
The initiative was sent by the Executive to the National Congress months ago. The purpose of the bill, which is called "Financial Plan of Solidarity Rescue", is to benefit people and companies that were affected by the spread of covid-19, with the payment of their debts.
In the last few months, interest in credit cards has been increasing in the digital environment, a rise that is mainly explained by the behavior of consumers in Panama, Honduras, El Salvador and Costa Rica.
Through a system monitoring changes in consumer interests and preferences in Central American countries in real time, developed by CentralAmericaData, it is possible to project short and long term demand trends for the different products, sectors and markets operating in the region.
The current business scenario ended up breaking down several barriers, and now there are more customers who demand the online services of financial institutions, which are challenged to facilitate digital processes and in turn apply strict security standards.
In the last four months, in most Central American cities, bank clients have moved away from the bank's service points, because between the home quarantines decreed due to the spread of covid-19 and the preference to avoid attending places where large numbers of people can congregate, consumers are choosing to look for ways to carry out transactions digitally.
In the countries of the region, more than 8 million people are looking for credit on the Internet. Of this group of consumers, approximately 9% explore options for taking out a student loan.
The interactive information system developed by CentralAmericaData monitors in real time the changes in consumer habits in all markets of the region, with fundamental information to understand the new commercial environment that has emerged in an accelerated manner.
At a regional level, nearly 16 million people are looking to purchase financial services online. Of this group of consumers, approximately 11% are exploring options for acquiring a credit card.
The interactive information system developed by CentralAmericaData, monitors in real time the changes in consumer habits in all markets of the region, with fundamental information to understand the new commercial environment that has emerged in an accelerated manner.
In the scenario of the health crisis and the decreed quarantine, it is reported that as of April, the balance of savings deposits of individuals amounted to $5,283 million, 15% more than the same month in 2019.
At the beginning of the year the authorities of the Central Bank of Honduras (BCH) estimated that for this year deposits in the financial system would increase by about 8%, however, this figure has almost doubled.
The coronavirus has left an economic impact in several countries. For this reason, some governments are developing exceptional measures to mitigate its effects. For example, the suspension of tax and mortgage payments to lessen the economic pressure on small businesses and households.
In the United States, interest rates were reduced to almost zero and a US$700 billion stimulus program was launched in a bid to protect its economy, says Mario Miranda, director of finance at MonederoSMART.
In recent weeks, the country's financial system has seen a considerable drop in the lending rate on new loan operations, which is partly explained by the reduction in the Monetary Policy Rate.
According to reports from the Central Bank of Honduras (BCH), between March 9 and April 10, 2020, the rate fell from 14.81% to 10.31%. This fall is being recorded in the context of the health crisis caused by the outbreak of covid-19.
Fitch Ratings agreed to change the perspective of the region's banks from stable to negative, arguing that the current health crisis will affect financial institutions in all countries.
Considering the measures that countries have adopted in the last 15 days in economic matters, following the spread of covid-19, Fitch expects that there will be a decrease in the issuance of loans.
It was agreed that debtors and financial institutions may define a new maximum payment date, in all those cases where the customer had to pay their fee during the curfew, which will be in force until April 12.
A grace period will also be granted that could be until June 30, 2020, depending on the needs of each client and the ability of the bank to maintain the necessary liquidity without receiving those payments, reported the National Commission of Banks and Insurance (CNBS).
The impact of the coronavirus crisis on the financial sector in Central America is expected to be felt mainly in services related to stock brokerage and investment advice, where a drop is expected.
The "Information System for the Impact Analysis of Covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
As of January 2020, the country's private sector external debt amounted to Ch$1,802 million, 9.78% higher than that reported for the same month in 2019.
From the Central Bank of Honduras report:
The structure of the private external debt balance per type of debtor showed that the Financial Private Sector (SPrF) owes US$1,657.4 million (92.0% of the total) and the Non-Financial Private Sector (SPrNF) US$144.6 million (8.0%).
In a context where economic activity continued to show moderate growth at the end of 2019, the Central Bank decided that as of February 10th the Monetary Policy Rate would be reduced from 5.5% to 5.25%.
From the Central Bank of Honduras press release:
February 5th, 2020. In the ordinary session No.171 held on February 4, 2020, the Open Market Operations Commission (COMA) of the Central Bank of Honduras (BCH) analyzed the current economic conditions and the most recent domestic and external perspectives. In the international environment, global growth projections for 2020 and 2021 were revised downwards by the International Monetary Fund, as a result of lower growth prospects in the United States of America (USA), the Euro Zone, basically Germany and Spain, as well as some emerging countries, including India, Mexico and Chile. The above is added to the world uncertainty for the economic effects that could be derived from the propagation of the coronavirus.
The National Congress of Honduras approved a decree to allow local agricultural producers with credits in arrears in Banadesa to manage the readjustment for a further six months.
On January 23, 2020, deputies approved a draft decree to give producers who have debts with the National Agricultural Development Bank (Banadesa) an additional six-month extension for the readjustment of their obligations, reported the institution.