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.
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.
Up to July 2019, gross loans in the country totaled $12,840 million, 5% more than the amount reported in the same month of 2018.
With respect to the assets of the banking system, data from the Superintendence of the Financial System (SSF) detail that up to July of this year totaled $18.558 million, which represents a $1.016 million increase when compared to the balance of the same month in 2018.
An extension has been given to the deadline to make payments without affecting credit ratings and there are more flexible requirements for loans up to $350,000, both part of the changes approved by the Central Bank.
From a statement issued by the Central Reserve Bank of El Salvador (BCR):
The productive sectors now have more opportunities to acquire appropriations loans for agriculture, manufacturing, export trade, construction, electricity, transportation, storage, communications and services.
The government has announced the signing of a $44.8 million loan with the Central American Bank for Economic Integration for the construction of the main building of the Attorney General of the Republic.
From a statement issued by the Attorney General of the Republic of El Salvador (FGR):
The General Prosecutor of the Republic, Luis Antonio Martinez witnessed the signing of a loan for $44.8 million with the Central American Bank for Economic Integration (BCIE) through its President Guillermo Funes Cartagena and the executive body.
The Central American Bank for Economic Integration has approved a loan for technical and physical renovation of the Water Treatment Plant in Las Pavas, in the department of Cuscatlan.
From a statement issued by the Central American Bank for Economic Integration (BCIE):
The Central American Bank for Economic Integration (BCIE) has approved a loan the to Republic of El Salvador in the amount of $64.4 million to finance the renovation project on Works for the Collection, Purification and Treatment of the Electromechanical Water Plant Las Pavas, the most important source of drinking water El Salvador.
The Banco de Desarrollo de El Salvador (Bandesal) has announced the availability of $10 to $15 million as part of a special credit line for small-scale renewable projects.
From a press release by the Banco de Desarrollo de El Salvador (Bandesal):
On Tuesday, October 22, in facilities of the Salvadoran Association of Industrialists (ASI) and in order to meet the financing needs for the development of projects for small-scale Renewable Energy generation, the Development Bank of El Salvador Bandesal in coordination with the National Energy Council (CNE) and ASI through the Unity Energy Facilitator with Renewable Resources (UFERR) presented to project developers the requirements and guarantees needed for financing projects which have sales contracts for long-term power.
Access to credit could get more expensive due to liquidity constraints and a higher country risk.
According to the Central Reserve Bank (BCR), last June returns on savings invested for 180 days was 3.44% while in the same period of 2012 the figure stood at 2.49%. In addition, interest rates on loans for over a year are 9.75% and in June 2012 they were 8.50%.
Only 14% of the Salvadoran population has a bank account.
As a way to promote financial inclusion, the U.S. Agency for International Development (USAID) and the Spainish-United Nations Fund for Achieving the Millennium Development Goals (MDG-F), insist on the creation of a regulatory framework to govern banking services.
"One of the main objectives is approval of the regulation on the subject of mobile transactions, which doesn’t require any physical branches, but access to technologies such as cell phones", says an article in Elmundo.com.sv.
The bank, notable for its A + rating awarded by Fitch Ratings, focuses on loans for the corporate sector and hopes to expand its credit portfolio thanks to the injection of funds.
The G & T Continental Bank, of Guatemalan capital, said that it is to receive a capital injection of about $10 million, which would increase its loan portfolio in El Salvador.
Banks in El Salvador remarked they have resources to boost the country’s economic recovery and lend them to companies.
Armando Arias, president of the Salvadoran Banking Association (ABANSA), explained they now have enough liquidity to assist the country in its economic recovery, thanks to being very cautious during the crisis.
“We have between $800 million and $1.000 million ready, we need investors to submit viable projects”, said Arias.
Embargoes enforced by banks for non payment of debts have caused the Salvadoran Assembly to convene the financial system trade unions.
Representative Alejandro Dagoberto Marroquím called for the Financial Committee of the Legislative Assembly to suspend embargoes through transitory measures.
In an article in Elsalvador.com, Guadalupe Hernández writes: "Representative Marroquín, who proposed the motion, explained that the transitory measure would suspend, for a 12 month period, embargoes executed by financial institutions on the ground of non payments ... The proposals did not reached a consensus, so representatives decided to convene ... the spokespersons of the financial system, to obtain more details on the topic".
The Multisectorial Bank of Investments (BMI) of El Salvador may start lending directly to businesses.
Set against the credit demands from different sectors, the executive is studying the possibility of reforming the BMI law so that it could lend directly to business owners rather than lending only to other banking companies.
Patricia Palma in her article in Elsalvador.com highlights the comments made by Carlos Acevedo, the president of the Central Reserve Bank (BCR): "We have a serious finance problem regarding the productive sectors, the banking system does not even take into account the applications....Reform to the BMI law would have to pass through the Legislative Assembly, for which a proposal is being drafted and it could be presented next week."