Colombia’s Earthquake Reconstruction Turns to 8 Percent Mortgages and Frozen Student Loans
COLOMBIA · RECONSTRUCTION
Key Facts
- —What happened BBVA joined the banks offering mortgages at 8 percent to Colombia’s earthquake victims this week.
- —How big the damage The 10 August quake destroyed about 11,000 homes and left losses near COP 30 trillion (US$9.6 billion).
- —Student relief Icetex suspended loan collections and interest for three months for 44,411 borrowers.
- —The catch The 8 percent rate is a bank offer, not a state subsidy, and the debt still belongs to the borrower.
- —Corporate money Organización Corona pledged COP 50 billion (US$16.1 million) for reconstruction.
- —What comes next Tourism guild Anato wants VAT on air tickets cut from 19 to 5 percent to revive travel.
Eighteen days after the 7.4-magnitude earthquake, the Colombia earthquake reconstruction effort has become a financial story. Banks are cutting mortgage rates, the state student lender has frozen collections, and corporate pledges are piling up.
The mortgage offer that became a race
BBVA Colombia will offer housing loans at 8 percent effective annual to people hit by the quake. The package adds benefits on property appraisals and title studies, La FM reported on Thursday.
BBVA is not first, because Davivienda announced a similar 8 percent offer on 24 August. Portafolio described Davivienda as joining a group of banks already in the scheme.
The rate matters because it sits below the central bank’s 12 percent policy rate. Lending to disaster victims at that level is a loss-leader by design.
The wider banking sector is offering grace periods and other relief, according to La República. The measures run through Asobancaria, the guild that groups the country’s banks.
Cheap credit is the fuel of any Colombia earthquake reconstruction, and 8 percent is cheap by local standards. Whether the offers survive the fine print on fees and insurance is the real test.
Icetex freezes student debt in five departments
The state student lender Icetex approved the most concrete relief of the week. It suspended loan collections for three months for 44,411 students and graduates in the disaster zone.
Current and late interest is frozen for the same period. Collection actions stop, and no new reports go to the credit bureaus.
The measure applies automatically in the five departments under emergency declaration. Valle del Cauca holds 29,680 of the beneficiaries, followed by Caldas with 5,443 and Risaralda with 5,253.
Quindío accounts for 3,267 borrowers and Chocó for 768. Icetex president Richard Caicedo said the package is funded from the entity’s own resources.
Borrowers who prefer to keep paying can do so, and their payments go straight to principal. Those who want out of the relief must say so through the Icetex portal.
The lender also extended credit applications and renewals for the second semester to 15 September. Education minister Viviane Morales framed the package as protection for students’ permanence in higher education.
The legal umbrella is decree 1171 of 11 August, which declared a national disaster. Decree 1261 of 19 August added an economic, social and ecological emergency.
Icetex already spends COP 520 billion (US$166.9 million) a year on interest subsidies, upkeep support and graduation write-offs. The freeze adds to that effort at the lender’s own expense.
A corporate giving race
Organización Corona, the building-materials group, pledged COP 50 billion (US$16.1 million) for the Colombia earthquake reconstruction. The announcement lands inside a widening competition of corporate donations.
Banker Luis Carlos Sarmiento Angulo announced COP 200 billion (US$64.2 million) for the affected. The Gilinski family pledged COP 150 billion (US$48.2 million) to rebuild Cali.
Nu founder David Vélez donated COP 100 billion (US$32.1 million) for victims. Companies grouped in ProPacífico committed COP 220 billion (US$70.6 million) to rebuild Valle del Cauca.
Pledges are not disbursements, and the pace of actual spending will decide their value. The government is tracking the money through its Fondo Milagro, created after the quake.
Foreign money is arriving on the same track. The World Bank announced a US$200 million disbursement, and 25 countries have completed more than US$47.96 million in donations.
The foundations of George Soros pledged US$1.5 million for the rebuild. Washington committed US$15.5 million through the State Department, plus a further US$11 million.
Anato wants a tax cut to restart tourism
The travel-agency guild Anato counted 40 member agencies affected in the Coffee Region. Its answer is a tax cut on the product it sells.
Anato asked the government to cut value-added tax on air tickets from 19 percent to 5 percent. The same cut was applied during the pandemic to stimulate demand.
The guild’s president, Paula Cortés Calle, has argued all year that tourism is Colombia’s second source of foreign currency. The sector earns more than US$11 billion a year and supports about 900,000 jobs.
The Coffee Region depends on exactly the visitors the tax cut would target. A cheaper ticket to Pereira, Manizales or Armenia is the fastest stimulus the sector can get.
Colombia received 6.5 million non-resident visitors in 2025, of whom 4.7 million were foreigners. Tourism generates 15 percent of total exports and more than half of services exports.
Tourism is the piece of the Colombia earthquake reconstruction that tax policy can touch fastest. So far the finance ministry has not answered the VAT request.
The bill behind the Colombia earthquake reconstruction
The earthquake struck at 7:34 on the morning of Monday 10 August. It registered magnitude 7.4, with its epicentre in San José del Palmar, Chocó, the strongest in Colombia in decades.
The latest official balance counts 321 dead and more than 4,595 injured. The housing minister confirmed about 11,000 homes destroyed.
More than 31,000 further homes were damaged across the affected departments. Cali and Pereira together reported almost 200 collapsed buildings in the first surveys.
Total losses are estimated near COP 30 trillion (US$9.6 billion), and Valle del Cauca concentrates COP 19.5 trillion (US$6.3 billion) of them. That bill would shave 0.27 points off economic growth in 2026, La República calculated.
The investment bank BTG Pactual put the initial reconstruction cost near COP 20 trillion, about US$6.35 billion. President Abelardo de la Espriella has spoken of figures above COP 30 trillion (US$9.6 billion) once infrastructure is added.
A full rebuild of the affected zones will take almost six years, according to the government’s own estimates. The Colombia earthquake reconstruction is therefore a budget line, not an event.
What this means if you live or invest in the zone
Foreign residents with Icetex loans in the five departments get the freeze automatically. Nobody needs to file paperwork to receive it.
Anyone house-hunting in the zone will now meet the 8 percent offers at several banks. The terms are commercial products, so the small print on insurance and fees decides the real cost.
For investors, the giving race signals where the Colombia earthquake reconstruction will concentrate contracts. Cement, steel and construction names sit at the front of a COP 30 trillion (US$9.6 billion) pipeline.
For travellers, the Anato proposal would cut the tax on every domestic ticket. Nothing changes until the government says yes, and it has not.
Frequently Asked Questions
Which banks offer 8 percent mortgages after the Colombia earthquake?
BBVA joined the group this week with housing loans at 8 percent effective annual, plus benefits on appraisals and title studies. Davivienda announced a similar offer on 24 August.
What exactly did Icetex suspend for earthquake victims?
Loan collections, current and late interest, collection actions and credit-bureau reports, all for three months. The measure covers 44,411 students and graduates in five departments and applies automatically.
How much has the private sector pledged for the Colombia earthquake reconstruction?
Organización Corona pledged COP 50 billion (US$16.1 million). The largest single private promise is Luis Carlos Sarmiento Angulo’s COP 200 billion (US$64.2 million).
Connected Coverage
We covered the restaurant sector’s plea in Colombia’s Restaurant Sector Asks for Urgent Post-Earthquake Lifeline, the insurance wave in Colombia Quake Insurance Claims Triple as Court Weighs Pension Reform and the sector’s rise in Colombia Tourism Revenue Now Tops Coffee and Coal Exports.
Sources: La FM, El Colombiano, Portafolio, La República, El Espectador, Ceipa. Exchange rate: COP 3,114.72 per US$ (open.er-api.com, 28 August 2026).
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