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.
Between 2011 and 2014 the number of people with bank accounts grew in all Central American countries, with noteworthy growth in El Salvador of 23%.
In Guatemala bankariztion grew by 19% in the period in question, reaching 9.2 million people with at least one bank account. In Honduras' growth was 11%, Costa Rica's 14%, Panama's 19%, and in Nicaragua, the increase was only 5%.
Mortgage loans and loans for the purchase of vehicles, as well as financing through credit cards are the most dynamic categories in the banking system's loan portfolio.
In the period up until January 2015 it was reported that Panamanians owed approximately $25 billion in personal loans. The balances on credit cards and personal loans recorded an increase of 15.6% compared to January 2014.
The group has announced that as part of its long-term strategy it will withdraw from the consumer banking business in Costa Rica, El Salvador, Panama, Guatemala and Nicaragua.
Extract from a statement issued by Citigroup:
Citigroup today announced strategic actions to accelerate the transformation of its Global Consumer Banking (GCB) to focusing on those markets where it has the largest scale and growth potential.
In Costa Rica, Panama’s Banco General is starting a push into the country’s consumer banking market.
In its first year of operation, the bank focused only on corporate customers, but will now expand into the consumer banking market gradually. They will start by offering mortgage loans.
Alberto Sauter, the bank’s manager in Costa Rica, explained that they started with $80 million in capital, and plan to reach $500 million in the medium term.
The banking institution will shift its focus from corporate clientele to retail banking.
Gilberto Serrano, Lafise manager, explained that in 2010 the bank will grant more loans for home and auto buying, as well as consumption. They plan to open more branches and hire experienced staff in this area.
Lafise stated that they do not intend to compete with the large banks who already dominate this market, but to offer a different product.