Given the outbreak of covid-19 and the imposition of restrictions on economic activity, between February and June of this year the amount of loans granted by the banking sector reported a 1.2% drop.
Data from the Superintendence of the Financial System (SSF) indicate that between February (the month before the beginning of the health and economic crisis) and June of this year, the credit portfolio contracted by $149 million, from $13.276 million to $13.127 million.
Between May 2019 and the same month this year, the number of credit cards circulating in the Salvadoran market increased by 9.2%.
According to figures from the Observatory of Credit Cards (OTC), of the Consumer Defense Office, in May 2020 there were 876,197 credit cards circulating in El Salvador, which is more than the 801,822 registered in the same month of 2019.
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.
IDB Invest granted an $8 million loan to American Industrial Park, owner of an industrial park in El Salvador, to invest in expansion works and the installation of a photovoltaic park for self-powered electricity generation.
The financing, with an 11-year term, will enable American Industrial Park (AIP) to maintain its competitiveness over the medium term by expanding its 17,000 square meter industrial roof.
Following the entry into force of the Usury Law, the Central Bank published the maximum annual interest rates, which for credit operations in colons amount to 37.69% and 30.36% in dollars.
The law that was published on June 20, 2020 establishes the methodology to be used to set the maximum interest rate, and stipulates that the Central Bank of Costa Rica must publish on its website and on The Gazette, the maximum usury rates in the first week of January and July each year.
A law was published in the Official Journal establishing a moratorium on loans granted by banks, cooperatives and finance companies, both public and private, until December 31, 2020, for natural and legal persons affected by the pandemic.
The law promulgated on July 1 in the Official Journal, states that the benefits of the moratorium will be available to persons whose employment contract has been suspended or terminated, independent workers and traders whose activity has been affected by the health measures applied by covid-19.
Setting a maximum usury rate and preventing clients from getting into debt to the extent of reducing their income below the minimum wage line are some of the changes that have arisen due to the application of the new law that has been in force since June 20.
On June 20, 2020 the Usury Law was published in the scope number 150 to La Gaceta number 147, which establishes the methodology to be used to set the maximum interest rate, from which the crime of usury will be considered to exist, details an official statement.
After President Cortizo partially banned the moratorium bill, the National Assembly discussed the initiative in a second debate, which was unnecessary for the Superintendent of Banks, who said that the banks had already implemented the necessary measures.
Despite the fact that on May 4 President Laurentino Cortizo and the representative of the Panamanian Banking Association, Aimee de Grimaldo, signed an agreement to extend the moratorium until December 31, 2020 due to the economic crisis caused by covid-19, the deputies declared themselves in permanent session to discuss the moratorium project (already banned by the president) in second debate in extraordinary sessions from June 15 to 18.
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 El Salvador, the Legislative Assembly decided to extend until June 1, 2021, the validity of the Decree of the Special Law to Facilitate the Cancellation of Agricultural and Livestock Debts.
The approval was made with the aim of giving the peasants who benefit from this regulation approved in 1998 a new period of 12 months to cancel the debts acquired with the banks, the Legislative informed.
CABEI granted a loan to Guatemala to finance the construction and equipping of buildings to be used by the Ministry of the Interior, National Police stations, prisons and other projects.
The $300 million will support the "Investment and Modernization Program for the Justice Sector", which will be implemented by the Guatemalan Ministry of Government, reported the Central American Bank for Economic Integration (CABEI).
Given the political and economic crisis affecting the country since April 2018, a scenario that has combined with the crisis of covid-19, the loan portfolio increased from $5,172 million in March 2018 to $3,404 million at the end of April 2020.
According to figures of the Superintendence of Banks and Other Financial Institutions (Siboif), in the first four months of the year a decrease in the credit portfolio is also reflected, since it went from $3.578 million reported at the closing of 2019 to $3.404 million recorded in April 2020, representing -5% variation for the four-month period in question.
The U.S. International Development Finance Corporation offered a $250 million quota for companies in the country to invest in health sector projects.
Directors of the International Development Finance Corporation (DFC) were the ones who reported last May 11 the existence of these financial resources. The exclusivity of these $250 million for companies in the health sector is due to the current health emergency situation, which derives from the outbreak of covid-19.
The Executive presented before the Legislative Assembly the draft law of the loan contract with the Central American Bank for Economic Integration, which will be used for the construction of the Passenger Electric Train of the Great Metropolitan Area.