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.
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.
From November 10 the law regulating the activity of micro financing comes into force and forces these types of companies to register with the Superintendency of Banks.
With the entry into force of Law 30 regulations governing issues related to liquidity, solvency and corporate governance will be published.
The controversial law limiting interest rates charged by credit card issuers was sanctioned by President Maldonado and will take effect on March 8, 2016.
Despite the request of the financial sector to veto the new law , president Maldonado decided to sanction it, and now the Superintendency of Banks will have to issue the necessary regulations for its implementation.
A warning has been given that 44% of microfinance clients are overindebted and that a change is required in the regulation in order to reverse the situation.
A study prepared by Grupo Analítica, SA for the Network of Microfinance Institutions of Guatemala (Redimif) said that the main problem behind the high level of indebtedness is the poverty that affects most of the debtors, many of whom live in the poorest departments, such as Totonicapan, Suchitepequez, Quetzaltenango, Zacapa and Sacatepéquez.
Excess dollars due to higher income from remittances and foreign credit lines account for the 18% increase in the loan portfolio in that currency.
The reporting period is the year between June 2014 and March this year.
The increase in remittances and credit lines that banks have externally has generated a surplus which the banking system captures and re-enters the market through loans.
For the last four years the loan portfolio of the Salvadoran financial system has been growing at an average rate of 3.5%, below the 11% growth average in the rest of the region.
A report produced by the rating agency Moody's notes that growth in El Salvador's financial sector has been stagnant since 2010, as the total loan portfolio has not achieved growth rates above 3.5% per year.
Companies in the sector are warning of over-indebtedness in some areas of the country and are asking for adjustments to the rules that regulate the activity.
At the end of the first quarter of 2014, the country has a total of 1,708 outstanding microloans, with a total balance of $774,000 and having a default rate of 1.84%, according to data from the Bank of Guatemala (BANGUAT).
Banks loaned $248.1 million in the first quarter of 2010, 30.7% more than in the same period 2009, when they loaned $190 million.
As defined by the Guatemalan Banking Superintendence, durable goods include: furniture and household utensils, clothing and vehicles for personal use, material, study furniture and equipment, buildings and real estate mortgages.
An agreement between international organizations will provide up to $250 million in loans for Latin America's micro-financing entities.
The agreement was signed by Multilateral Investment Fund (Fomin), part of Inter-american Development Bank (IDB), Inter-American Investment Corporation (CII), Andean Development Corporation (CAF), Overseas Private Investment Corporation (OPIC) and Blue Orchard Finance.
June shows 12-month growth in credit at 6.7%, below the 11.7% it had at the beginning of this year.
According to the president of the Chamber of Industry of Guatemala, Thomas Dougherty, uncertainty about the international economy and contingency plans brought about by companies are a few of the causes for the decrease in requests for lines of credit.
Worker’s Bank (Bantrab) of Guatemala has $61 million to place as personal loans and loans for MSMEs.
The funds for reviving the economy and meeting the financing demand from its customers come from a $30 million line of credit from the Central American Bank for Economic Integration (BCIE) and local funding, explained Bantrab CEO, Ronald García to Elperiodico.com.gt.
The financial firm, property of the Puerto Rican Caribbean Financial Group (CFG), will begin operations in April.
It will focus on financing for businesses that sell on credit and on personal loans.
According to the note published in elPeriódico in Guatemala, the corporation "has more than $300 million in assets and offices in Panama, Aruba, the Netherlands Antilles, Trinidad and Tobago and Mexico.
The management of micro-financing in the context of the global financial and economic crisis implies challenges, but also opportunities.
With the title "The World Crisis and Micro-Finance," the Academy of Central America organized a discussion for legislative advisors and journalists, where a professor of Ohio State University, Claudio González Vega, analyzed the role of the micro-finance in the current situation.
It is necessary to prevent the governmental assistance to less solvent debtors from destroying the payment culture.
The micro-finance sector globally has a very low level of default, a product of a culture that is important to preserve by restructuring contracts in risk instead of granting direct financial assistance to debtors.