Tourist expansion drives surge in bank credit in Pedernales

Santo Domingo.- Credit allocated to the public sector saw a notable increase of 11.9% in 2023, with the southern region’s portfolio expanding by 16.5%, led by Pedernales province, which experienced the highest growth. This growth is attributed to the implementation of a tourism development plan initiated by the State in Cabo Rojo.

The Superintendency of Banks recently released a report on credit in the financial system at the end of 2023, highlighting the significant increase in the credit portfolio to the public sector, amounting to an additional 4,113 million pesos.

At the close of last year, the balance of the public sector portfolio stood at 38.6 billion pesos, though its proportion within the total portfolio marginally decreased from 2.1% to 2.0% year-on-year.

The 16.5% surge in the credit portfolio of the southern region equates to 13,383 million pesos. The remarkable 28.4% expansion of credit in southern Pedernales is primarily fueled by the construction sector, which witnessed a remarkable increase of 61,147 million pesos.

According to the Superintendency of Banks, this growth can be attributed to the execution of the Tourism Development Plan in Cabo Rojo, which includes the construction of hotel infrastructure and area development facilitated through the Pro-Pedernales Trust and the General Directorate of Public-Private Partnerships (Dgapp).

This surge in credit activity marks a significant transformation for Pedernales, which has long been considered one of the country’s poorest provinces. While the southern region previously saw growth in loans, they were predominantly directed towards activities involving international bodies, financial and insurance sectors, and manufacturing industries, as reported by the Superintendency of Banks.

In addition to hotel construction, the tourism development plan for Pedernales encompasses the establishment of an international airport, a cruise port, service infrastructure, residential units, and improvements to access roads.

As of January, the initiatives undertaken in this region under the current government, which commenced in August 2020, had led to the establishment of 50 small hotels and businesses, as noted by Sigmund Freund, head of the Dgapp at the time.