QCOSTARICA – Bank lending in Costa Rica has slowed down, falling from a rate of 16% in March 2014 to 8% in the same month this year.
According to a report in Elfinancierocr.com, dollar loans by state banks are showing the biggest decline, after a rise last year, while the decline at private banks is not as drastic.
The report says the state banks saw an increase of 36% a year ago, compared to only 2% this year. At the private banks, the growth went from 35% last year, to 22% this year.
Carlos Brina, assistant manager of Scotiabank, told Elfinancierocr.com that “… This lower growth in lending is associated with market reasons. Possibly, the figures are affected by the effect of the depreciation of the colon. When segmenting the loan portfolio by type of bank or currency, a clearer picture of what happens to the money emerges.
“… The downward trend began in May 2014 and since then has been falling, with the exception of last December, when he had a break. ”
Source: Elfinancierocr.com
Excellent news for Costa Rica. Do not get involved in consumer debt. Don’t end up like gringos. Don’t need to buy all the crap they push on you through corporate brainwashing advertising.
This article is too cryptic to tell us much, but recent figures show that credit card debt is up in Costa Rica, so I don’t think that consumer debt is down. It looks like the banks are making fewer mortgages and business loans, which is a bad thing. It also appears from the quoted banker that the banks are lessening lending based upon projected currency values, which they largely control. This is more bad news. My hunch is that the banks are one of the main obstacles to economic development here, since they happily charge credit card customers 50% interest and therefore don’t have much of an incentive to make the business or mortage loans that would help the economy.