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.
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.
On February 14th and 15th, representatives of banks, international financial institutions and risk rating agencies will meet in Panama City to discuss issues related to the sector.
The event called "International Banking Congress for Regulators & Bankers," will be organized by the Superintendence of Banks of Panama (SBP) and seeks to address issues such as Basel III, prevention of money laundering, de-risking, new risks facing the industry, financial innovation-Fintech, cybersecurity, among others.
On October 12 and 13 representatives from the banking and financial sector will be gathering together in Panama City to discuss issues relating to regulation, business and investment.
The International Finance Summit is an event being organized by the Banking Association of Panama and will be held at the Hotel Trump Ocean Club Convention Center.
The proposal includes changing the conditions needed to order the forced liquidation of an institution, facilitating the fight against financial activities related to criminal activities.
The purpose of the reform prepared by the Executive Branch is to tighten controls to prevent money laundering and terrorist financing, in order to identify any suspicious situations and avoid the forced liquidation of the entity, as was done in 2015 for Banco Continental.
The Central Bank has reduced the benchmark rate by 50 basis points as a result of stable performance shown by the economy.
The Board of the Central Bank of Honduras reduced, from 28 March 2016, the monetary policy rate by 50 basis points, fixing it at 5.75%.
From a statement issued by the Central Bank:
The Commission on Open Market Operations (COMA) at the Central Bank of Honduras (BCH), in ordinary meeting No.126 on March 15, 2016, discussed the recent developments and prospects for the main macroeconomic and financial indicators, both at the national and international level.
The microcredit portfolio in Latin America and the Caribbean is worth over $40 billion, is awarded by more than 1,000 institutions, and reaches more than 22 million customers.
From a statement issued by the Inter-American Development Bank (IDB):
A new report documents significant expansion of microcredit in Latin America and the Caribbean
GUAYAQUIL, Ecuador - Microcredit in Latin America and the Caribbean remains strong and continues its expansion of the last decade, experiencing an increase in their number of customers, a variety of institutions and a downward trend in interest rates according to new data released here today by the Multilateral Investment Fund (MIF), a member of the IDB Group.
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.
Central American financial institutions are offering their customers new financing alternatives.
The firm Invermaster has indicated that some seventy banks have $500 million to invest in companies in the region.
"One alternative that has gained importance, according to Invermaster, is 'mezzanine financing', an intermediate instrument between traditional debt and equity investment.
Interbolsa’s assets, liabilities and contracts have been acquired by Bancolombia in order to ensure the stable operation of the public debt market and Colombia’s payment system.
A statement from the Financial Supervision reads:
FINANCIAL SUPERVISOR AUTHORIZES MEASURES WITHIN THE TAKEOVER PROCESS OF INTERBOLSA SCB
- Authorization has been given for Interbolsa SCB to transfer to Bancolombia its operations of future performance, repurchase agreements and sell/buy-back transactions backed by TES, ensuring stability in the operation of the public debt market and payment system.
For class "A" businesses, the lending rate in domestic currency now stands at 14.7% and 7.2% for loans in foreign currency.
A 100 basis point increase in the Monetary Policy Rate (MPR) decreed by the Central Bank of Honduras on 14 May, is the main reason behind this increase.
After the hike in the monetary policy rate, the response from the Honduran Association of Banking Institutions (Ahiba) was given immediately: "the action of the board of BCH has resulted in increases in interest rates, increasing borrowing costs and reducing the circulating currency, thereby affecting the availability of credit for the private sector. "
The application of internationally used theoretical models by emerging countries is like "precision measuring with a ruler, drawing with a pencil and cutting with an axe."
"According to various surveys on international financial policies and practices, the most commonly used to estimate the cost of shareholders’ resources is the Capital Asset Pricing Model , known as CAPM for short."
Economy and Development Report by CAF - Development Bank in Latin America -entitled Financial Services for development: promoting access in Latin America.
From the introduction of the first chapter of the report:
Access to financial services - Development and Welfare
Why could access to financial services be an important factor for economic development and welfare in Latin America? A first important aspect is that financial institutions have the mission to attract domestic savings, and possibly also those from external sources, to finance both working capital (liquidity needs) such as business investment (physical capital). Meanwhile, families also require credit to finance investment or expenditure needs (e.g. children's education or purchase of durable goods), whose timing may not coincide with the availability of current income or savings.