Andina

Peru: Dollarization ratio of credit to private sector down by 21% in Dec 2020

Photo: ANDINA/Archive

Photo: ANDINA/Archive

11:50 | Lima, Feb. 2

Low-interest rates were observed on new loans in all business segments in December 2020, especially in the segments of loans to micro, small, and medium-sized companies, the Central Reserve Bank (BCR) has reported.

The average interest rate in Peruvian Soles (S/) for loans to micro-businesses fell from 44.3% in December 2019 and from 42.8% in April 2020 to 30.1% in December 2020.

For its part, the interest rate in Soles for loans to small businesses fell from 22.6% in December 2019 and from 22.2% in April 2020 to 17.2% in December 2020.

Similarly, the interest rate in Soles for loans to medium-sized companies fell from 10.0% and 9.3% to 6.1% in the same periods. This fall in interest rates reflects the effect of the Program of Government-Guaranteed Loans.

According to the BCR, the dollarization ratio of credit to the private sector dropped to 21% in December 2020, a level significantly lower than that observed in December 2019 (26%).

This substantial reduction is mainly explained by a lower dollarization ratio of credit to businesses, which decreased from 37% to 27% year-on-year at the end of 2020.

On the other hand, the dollarization ratio of credit to individuals continued to show it downward trend, decreasing from 9% to 8%, it concluded.

(END) NDP/MVB

Published: 2/2/2021