bank credit Banking loans Salvadorean Banking Association access to credit credit contraction Armando Arias restriction of credit Banks Central Reserve Bank of El Salvador credit risk credit-crunch liquidity (money) loan Banco Agrícola El Salvador

Fewer Loans to Private Sector in El Salvador

At the end of February the loan portfolio of Salvadoran banks was 4.6% smaller than the same month of 2009.

Monday, April 5, 2010

©image: Eric Thalmann

In February 2010 banks had a combined loan portfolio of $8.09 billion, down from $8.47 billion in February 2009.

Claudio de Rosa is the former CEO of ABANSA, the Association of Salvadoran Banks. He told Elsalvador.com: “this sharp reduction in credit to private individuals and companies is a result of less demand and lack of confidence, in addition to lower remittances, higher unemployment and less exports”.

Source: elsalvador.com

Key entities

Salvadorean Banking Association

Countries

El Salvador

Insight

credit risk restriction of credit line of credit loans bank credit credit contraction access to credit Banking

Salvadoran Banks carefully analyze new credits

November 2008

Salvadoran banks have started to restrict the granting of credit in order to avoid a liquidity crisis.

Various banks in the system "are being much more prudent and more cautious in their credit analysis," said the president of the Salvadoran Banking Association (Abansa), Armando Arias.

Honduras: Credit Stagnant due to Over-Regulation

May 2011

The high reserve requirements and government regulation are preventing the growth of private sector credit.

While the coffers of the banks are filled with notes due to growth in deposits and liquidity in the economy, the country's productive sector can not find adequate financing to boost growth.

Credit Card Market Stagnant in El Salvador

April 2010

Consumer budgets are still healing from the economic crisis, delaying a recovery in credit card lending.

Almost 60.000 credit cards were cancelled during 2008 and 2009, half of them for delinquency by their owners. Many others maxed out their credit and cannot use their cards anymore.

Salvadoran builders unable to sell homes

December 2008

With a few days left before the end of 2008, there is concern about the inventory and little or no sale of houses in the market due to the credit restriction.

Mario Rivera, president of the Salvadoran Chamber of the Construction Industry (Casalco), added that the companies still have apartments or houses and that "they are unable to sell them because there is no financing for family," and therefore run the risk that the builders will not be able to fulfill their commitments with the banks.

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