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 Costa Rica, the Alvarado administration would be considering the creation of a tax on each transaction that a person or company makes through a financial entity, a tax that will discourage savings and motivate people to use cash.
In order to discuss a medium and long term credit with the International Monetary Fund, the Costa Rican authorities would be planning to design and create a new tax, which consists of each person paying a tax of ¢3 for every ¢1.000 in the transactions they make through a bank, finance company, mutual fund, stock exchange or any other financial entity.
The official notice obliging all entities of the country's financial system to provide the tax authorities with information on the bank accounts of all their foreign clients was published in the Gazette.
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.
Managers of Costa Rica's financial institutions predict that due to the health crisis the country is going through, the demand for credit from companies and families will continue to fall in the coming months.
Figures from the Central Bank of Costa Rica state that between March 2019 and the same month in 2020, the balance of money lent by public and private banks to companies and families decreased by 2.3%, from $28,559 million to $27,908 million.
This week, the Basic Passive Rate continued to fall, from 3.8% to 3.75%, while the Effective Rate in dollars also fell, from 1.94% to 1.84%.
The Central Bank of Costa Rica published on the afternoon of Wednesday, April 15 that after registering considerable drops in the previous weeks, the Basic Passive Rate fell again, in this case by 0.05% and will remain at 3.75% until next Wednesday, April 23.
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.
CABEI granted a loan that will be assigned to the country's state banks, resources that will be used to support the productive sectors in the context of the national emergency.
With the aim of strengthening the liquidity of state banks in the face of the national emergency caused by the covid-19 pandemic, the Central American Bank for Economic Integration (CABEI) authorized the disbursement of US$50 million for the Banco Nacional de Costa Rica and US$40 million for the Banco de Costa Rica, reported the international organization.
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.
For the Central Bank of Costa Rica, the constant reductions in the Monetary Policy Rate that have taken place since March 2019 have been gradually and incompletely transferred to the interest rates of the financial system.
In Costa Rica, the Basic Passive Rate dropped from 4.95% to 4.80%, a drop that was influenced by the behavior of public bank rates.
The Central Bank of Costa Rica published on the afternoon of Wednesday, February 26 that after registering a considerable drop the previous week, the Basic Liable Rate fell again, in this case by 0.15% and will remain at 4.80% until next Wednesday, March 4.
The Costa Rican Legislative Assembly approved in first debate the bill that creates a deposit guarantee fund and resolution mechanisms for the banking system.
The objectives of the deposit guarantee are to protect depositors, particularly small ones, and to strengthen financial stability in the event of a bankruptcy of an intermediary, through timely payments to insured depositors and maintaining confidence in the financial intermediation system is critical to avoid bank runs and protect financial stability, the legislative body explained.
Although The Central Bank has been reducing the monetary policy rate to boost the issuance of bank credit, the speed with which the portfolio of loans in national currency grows continues to decrease.
Official data from the country's financial system indicate that by October 2017 the portfolio of loans in local currency grew to 14%, in the same month of 2018 the rate fell to 6% and by the tenth month of 2019 the increase was just 4%.
In Costa Rica, the growth of credit granted in U.S. currency to the private sector is the lowest in a decade.
Credit to the private sector does not show signs of recovery and, instead, the data available until August show an additional deterioration that took it to its lowest point in 10 years, reporting a year-on-year fall of -0.01%.
An analysis prepared by the advisory firm Frecuencia Económica indicates that the low growth is explained by the contraction of loans in dollars, since the portfolio in colones shows a 4.2% growth among the banking system, while the portfolio in dollars presents a fall of 3.9%.
Although the downward adjustments made months ago in the bank reserve and monetary policy rate do not yet appear to have had an effect on the loan portfolio in Costa Rica, banks expect credit to be reactivated soon.