For 2021, some of the financial institutions competing in the Costa Rican market are betting on placing loans for the purchase of homes, consumer loans and business financing.
In Costa Rica, home purchase loans were already showing positive signs at the end of 2020, since in November of last year the amount of the loan portfolio in question reported a 7% year-on-year increase.
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.
In Costa Rica, a law initiative under discussion seeks to set caps on interest rates on loans, a measure that could lead to a reduction in the offer of credit for debtors classified as higher risk.
As part of a bill being discussed in the Legislative Assembly, the heads of the Central Bank of Costa Rica (BCCR) and the General Superintendence of Financial Entities (Sugef) were asked to give their views on the content of the proposal.
In Honduras, a temporary provision was approved so that producers who have been affected by climatic factors, pests, prices or general market conditions can adjust their debts.
The measure that will be in force until December 31, 2019, contemplates the refinancing and adaptation of the loans that coffee producers and/or traders have with the institutions supervised by the National Commission of Banks and Insurance (CNBS).
CABEI granted a loan to Banco de Costa Rica, which will be used to finance operations by SMEs and business clients in the industrial, agricultural, and cooperative sectors.
The financing was made under the modality of disbursement of global line of credit, intended for working capital and boosting Costa Rican productive sectors, informed a source of the executive.
At year-end, according to corporate financing, the bank loan portfolio totaled $13.793 million, 6% more than at the end of 2017.
Superintendencia del Sistema Financiero (SSF) reported that the balance of the loan portfolio of financial institutions operating in El Salvador increased by $767 million between 2017 and 2018, rising from $13.026 million to $13.793 million.
Banco Centroamericano de Integración Económica signed a loan contract with the FCC Consortium to finance the six-lane extension of the beach corridor in Panama, Section I: La Chorrera-Santa Cruz.
The project "Expansion to six lanes, Las Playas Corridor, Section 1: La Chorrera-Santa Cruz, which has an approximate length of 36.3 kilometers, and begins at the end of the Arraiján - La Chorrera highway and ends at the entrance to Santa Cruz (before the crossing over the Lagarto River)," was awarded in November 2017.
In Honduras it has been reported that the $80 million that will be granted to the coffee sector is in the stage of consultation, risk analysis and verification of loan conditions.
Representatives of the Honduran Coffee Institute (Ihcafé) reported that two banking entities presented their proposals to manage the financing, which will be under the modality of syndicated credit, which consists of several institutions lending the funds, but only one will manage them and establish the conditions.
At the end of April of this year, the loan portfolio granted by banks amounted to $12.582 billion, registering a 13% increase compared to the same period last year.
According to figures from the National Commission of Banks and Insurance (CNBS), between the month of April 2017 and the same period in 2018, the loan portfolio grew by $1.433 billion, rising from $11.149 billion to $12.582 billion.
The international loan approved by Congress will be used to improve the response capacities of the country's emergency services and health services, social protection services and agricultural recovery.
From a statement issued by the Congress of Guatemala:
With 84 votes in favor, the Plenary of the Congress of Deputies approved this Wednesday, Decree 15-2018, which authorizes negotiations for a Loan Agreement, for US $250 million, between the Government of Guatemala and the International Bank for Reconstruction and Development, IBRD.
With a loan from the BCIE, the improvement and renovation of 195 kilometers of roads in different areas of the country will be financed.
The project involves the paving of 194.39 kilometers, divided into six road sections with different asphalt pavement structures, hydraulic concrete and concrete paving slabs.
The Development Bank of Latin America has confirmed another loan to finance the design and construction of the wastewater system in Arraiján and La Chorrera, in West Panama.
The funds will be executed by the Ministry of Health (MINSA) through the Coordination Unit of the Panama Sanitation Program (UCP).This is the seventh approval of a credit operation of the CAF to support the execution of the Panama Sanitation Program, which with this new disbursement reaches a total financing amount of USD 628 million.The resources of this operation will be used for the design and construction of networks and sewage collectors, as well as domiciliary and intra-domiciliary connections that allow houses to be incorporated into the sanitation system.
While the government's promised trust funds remain inaccessible, producers are negotiating credit lines in China and India in order to finance the renewal of coffee plantations.
Ricardo Arenas, president of the National Coffee Association (Anacafé), explained to Elperiodico.com.gt that"... in light of the difficulties in obtaining the support of the Government, they are knocking on doors in different places. This is because 'there are countries that have a lot of money which is not providing them with a return' and therefore would be willing to give it to some bank in the system under the right conditions."
By requiring banks to have additional capital requirements the Sugef aims to discourage consumer loans, mortgages and vehicles loans with long repayment terms.
Arguing that terms of over 30 years for housing loans and more than 5 in consumer loans encourages overindebtedness of Costa Ricans, the Superintendent of Financial Institutions (SUGEF) has presented a proposal toreform the ruleson capital adequacy of financial entities, in order to require entities that carry out these credit operations to have additional capital.
38% of total bank lending corresponds to housing construction, while 35% is used for buying new homes.
Data from the housing loan portfolio in the domestic financial system shows that the proportion of loans requested by Costa Ricans to build their homes is higher than loans used to buy existing homes.
Elfinancierocr.com explains that"...The Costa Rican financial system has a balance of credits which were used for housing amounting to ¢4.6 billion.This amount represents 25% of all outstanding loans in the country (¢ 18 billion). For housing construction, the balance is ¢1.75 billion and, for the purchase of new homes, it is ¢1.62 billion.Both lines represent 73% of the total."