Microcredit is the one that grew the most in a year in Ecuador

Ecuador’s private banking credit portfolio reached US$38.331 billion as of November 2022, 16% more than the same month of 2021.

Microcredit is the one with the highest annual growth, with 20.4% compared to November of 2021. That credit portfolio reaches US$3.066 billion.

This was reported by Asobanca in a recent report in which it also noted that bank deposits reached US$42.118 billion as of November, which represents an annual growth of 6.2%.

MORE LOANS FOR ENTREPRENEURS

“The contribution of private banks to the national economy is evidenced by an increase in credit in all segments: credit for micro-entrepreneurs and entrepreneurs reached US$3.066 billion in November 2022, 20.4% more than the same month last year,” highlights Asobanca.

The microcredit is intended for enterprises and microenterprises that record sales of less than US$100,000 per year. This is a key segment for the Ecuadorian economy, since it generates 27% of employment by 2020, according to figures from the National Institute of Statistics and Censuses (INEC).

There is also significant growth in the commercial/productive credit portfolio (SMEs, medium-sized and large companies) which reached US$17.561 billion as of November 2022, 15% more than in November 2021. “However, this growth shows a slight deceleration, based on the reduction of liquidity in the local market”.

The increase in reference interest rates, which the central banks of developed countries have used to deal with international inflation, has raised the cost of external financing for private banks, also restricting the liquidity that could come from abroad.

CONSUMER CREDIT

Meanwhile, the consumer credit portfolio reached US$14.996 billion in November, with an annual variation of 19%. Said segment is intended for the purchase of goods, services or expenses not related to the productive activity.

In other words, of the total credit portfolio, 60% (US$23.029 billion) was allocated to production loans (productive, housing and microcredit) as of November and 40% to consumer loans (US$15.302 billion).

MORE DEPOSITS

But the growth does not only occur in the loan portfolio, deposits also show an annual increase. The balance of bank deposits (or deposits) closed at US$42.118 billion as of November 2022, 6.2% more than the 2021 figure. This means an additional US$2.463 billion in the last year.

“This growth in deposits is a sign of the confidence that more than 7 million customers have in private banks, due to the solidity, stability and security that they provide when it comes to safeguarding their resources,” says Asobanca.

With information from Bloomberg Línea