Economy February 15, 2024 | 3:21 pm

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Association of Banks reports 44% growth in credit to builders for 2023

Santo Domingo.- The Association of Multiple Banks of the Dominican Republic (ABA) reported a significant increase in the credit portfolio for the construction sector. The portfolio surged by RD$30,118 million, marking a 44% rise, reaching RD$97,877 million by the end of 2023, compared to RD$67,759 million in 2022.

The growth was attributed to the contributions from the banks’ own funds and legal reserve resources released by monetary authorities to support the construction sector. A total of 2,059 new loans were extended, contributing to the existing 18,481 credits at the end of 2023.

Commercial banking constituted 82.8% of the funds allocated for construction financing. This type of interim financing, disbursed gradually as construction progresses, supports construction companies in acquiring materials, covering labor costs, and addressing other project-related expenses.

Simultaneously, financing for home acquisition witnessed a substantial increase of RD$35,944 million, representing a 19% relative growth. The mortgage loan portfolio expanded from RD$190,596 million in 2022 to RD$226,541 million at the close of 2023. This increment was facilitated through 9,347 new loans, doubling the operations compared to the previous year.

The breakdown of mortgage loans included RD$188,153 million (83%) for the acquisition of the debtor’s home, RD$24,999 million (11%) for the purchase of low-cost housing from a trust, RD$10,341 million (4.5%) for the acquisition of a second home or summer vacation, and RD$3,048 million (1.5%) for remodeling and construction of homes.

The ABA emphasized the banking sector’s role as the primary source of resources for home acquisition, constituting 65.8% of the total mortgage portfolio. The union reiterated the commitment of commercial banks to support construction, acquisition, and remodeling initiatives, such as the Happy Housing program, to alleviate the housing deficit and enhance citizens’ quality of life.

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