After closing 2016 with a 37% drop in profits, financial companies expect to achieve better results diversifying their services in an increasingly competitive market.
The total profits generated by financial companies in 2016 barely exceeded $2.4 million, a decrease of 37% compared to earnings in 2015.This year companies in the sector projected better results, some on them betting on the SME segment, some focusing on generating new business in the construction sector and others expanding their offering of services.
Lower demand for credit from the private sector is the main reason for the increase in liquidity in colones in the local financial system.
Although increased liquidity should be accompanied by a reduction in interest rates, this is not the case in Costa Rica, as expectations of a possible rate hike in the United States and internationally are being maintained and forcing them to be kept down.
From May 2013 to May 2014 the balance of deposits in dollars increased by 15%.
Up to May this year the balance of current accounts in dollars totaled $3.107 billion and in savings accounts $1.673 billion, 15% and 10% more than in May 2013, respectively.
The financial company Desyfin has received $10.5 million from a Norwegian investment fund and has made a request to become a bank next year.
Recently the financial firm revealed that it signed an agreement for $6 million in a share issue with which it will have an investment reaching $10.5 million from the Norwegian Investment Fund for Developing Countries (Norfund). With this, the company is on track to become a bank.
The BCIE has granted an additional $3 million to Desyfin's global credit line, meaning that the total amount it now has reaches $10 million.
With this money Desyfin will finance "programs to support micro, small and medium enterprises, financial intermediation programs for social housing, the housing and urban improvement program, and factoring products for suppliers," explains Nacion.com.
The financing company is registering with the regulating authority the creation of a financial group made up by the financing company, an insurance seller and a leasing company.
Silvio Lacayo, Desyfin manager, said the proceedings were initiated in 2011 with the Superintendent of Financial Institutions and they are awaiting final approval by the agency.
In Costa Rica, investments in local currency (colones) of up to six months can be found with rates ranging from 6.3% to 10.5%, where the minimum is between 25,000 to 1 million colones ($ 50 - $2,000)
In Costa Rica there is a wide range of investment options for 6 months terms.
Digital titles, capitalized interest and diversity of issuers are some of the characteristics of the term certificates market in the country.
CABEI and the country's largest finance company, Desyfin, have signed an agreement that will make $7 million available to small and medium sized enterprises (SMEs).
The Central American Bank for Economic Integration (CABEI) loan is part of the 'banca de segundo piso' ("second tier banking") program through which CABEI seeks to give SMEs better access to credit, according to Leticia Vindas writing for the El Financiero web portal.
The investment involves purchasing dollar-denominated perpetual preferred shares. In addition to strengthening Desyfin’s capital structure, the funds from the IIC will provide the company with direct financing to grow its medium- and long-term SME portfolio. Approximately 520 SMEs will benefit directly and indirectly from this operation.
In late 2010 Financiera Desyfin will begin its expansion plan, opening branches in new countries every three months.
Focused in SMEs, the company has factoring as one of its services. Its first branch outside Costa Rica will be either in El Salvador or Guatemala, and from there they will expand to the rest of the Central American countries.
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