Banco Popular y de Desarrollo Comunal tenders collection management services for accounts declared by the institution as written-off operations.
Costa Rica Government Purchase 2021LN-000005-0020600001:
"The model of this contracting is conceptualized under the consumption scheme according to demand, with which it is intended to have the services of a company that meets the needs that the Bank requires in the collection management service of accounts declared as written-off operations and/or estimated at 100%, it shall locate the debtors, guarantors and/or co-debtors of these operations and recover all or part of the amounts owed by them either through the total cancellation of the customer, refinancing, payment plan and/or payment arrangement in accordance with the policies in force and established for that purpose by the Bank, prior analysis of each case by the company and the definition of the technological tools to be used for negotiation with the customer (understood by tools to: telephone calls, e-mail, sending messaging, SMS, IVR or WhatsApp and all those tools available in the market for negotiation).
The use of predictive models based on artificial intelligence processes and automated collections are some of the changes that companies are already applying in this new reality to reduce operating, management and risk costs.
The spread of covid-19 changed the rules in almost all markets and business models, a situation that has affected the collections departments of companies, whose work teams are currently facing complex challenges.
The high levels of unemployment and the poor growth of credit are factors that have worsened in the context of the economic crisis generated by the outbreak of covid-19, which has led to the deterioration of the credit record of customers.
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.
In Guatemala, banks will grant deferrals and will wait for loans whose debtors are directly or indirectly affected by the spread of the coronavirus, specifically those that are not more than one month late on February 29.
The Guatemalan Banking Association (ABG) reported on March 21 that these decisions were made with the objective of supporting clients and users of banking services, who will be affected by the spread of covid-19.
In the last two years, non-performing loans to the agricultural sector increased from 2.4% to 5.9% between April 2017 and the same month in 2019.
Figures from the General Superintendence of Financial Entities (Sugef) indicate that the increase reported in the arrears of agricultural loans includes operations with delays of more than 90 days, as well as operations that are in judicial collection.
From June 2017 to May 2018, the average default rate of the Costa Rican financial system's credit portfolio increased from 1.36% to 2.14%.
According to figures from the General Superintendence of Financial Institutions (Sugef), between April and May of this year, Banco Nacional de Costa Rica (BNCR) saw an increased in its arrears of greater than 90 days and judicial collection from 2.65% to 4.18%, thus surpassing the 3% that is established as the prudent maximum limit.
The new law prohibits banks and financial institutions from implementing abusive practices in order to manage debt collection.
From a statement issued by the Congress of Guatemala:
With 108 votes in favor, Congress deputies approved amendments to the Banking Act, with which it prohibited harassment and abusive collection practices on the part of the lenders.
Although equivalent to 85% of GDP, analysts say the portfolio of bank loans to the private sector is at healthy levels and can grow further.
At the end of 2014 bank lending to businesses and households in the country amounted to $46,212.6 million, well above the amount of public sector debt, which closed in 2014 at an amount equivalent to 39.4% of gross domestic product (GDP).
The Directorate General of Revenue has announced that companies with tax debts more than twelve months old will be included in a list which will be published in March.
The Directorate General of Revenue has announced that it will publish, in the course of this month details of, "... taxpayers who have had outstanding accounts with the institution for more than a year." This measure is a result of low tax revenues being reported since late 2014.
The government has announced that it will stop the outsourcing of tax collections and reestablish it as a function of the Directorate General of Revenue.
The Minister of Economy and Finance, Dulcidio De La Guardia, also announced the elimination of the National Tax Authority, created in the previous administration, and the management and collection of taxes will go back into the hands of the General Revenue Department.
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.
Outsourcing the collection of unpaid taxes in Panama has generated comments that merit an analysis of the differences in efficiency between the public and the private sector.
Editorial
In Panama the Tax Revenue Authority has hired a private company to recover its arrears portfolio, gaining efficiency and reducing costs.
An article in Prensa.com by Oosvaldo Lau suggests otherwise, noting the "good business at the expense of the state" made by the contractor, who of course charges a fee for their work which varies according to the length of default of each debtor.
The Congress of Honduras is analyzing lowering credit card interest rates from 60% to 30%, in a rescue plan that includes pension funds buying that debt from the banks.
The rescue plan on overdue credit cards, which uses resources from pension funds, could lead to bankruptcy for these entities, Honduran economists warn.
An advisor to the National Congress, Eval Diaz, told prensa.hn that the debt amounts to about $750 million and through a legislative decision the portfolio would be bought in addition to lowering interest rates on credit cards from 60% to 30%.
Past due loans increased to $325 million, 22% more than the same period of 2009, when they summed $266.2 million.
Loans for consumption, home buying and commerce are the ones experiencing the highest levels of overdue payments, according to data from Abansa (Banking Association of El Salvador).
“The overdue loans index rose to 3.76%, up from 2.93% in the same period of 2009”, reported Elsalvador.com.