Economy January 23, 2023 | 3:00 pm

Banking sector grants credits for RD$98 billion to tourism in 2022

Dominican banking plays a critical role in tourism development by financing hotel projects and related businesses, with a credit portfolio that exceeded RD$98 billion (US$1.75 billion) by the end of 2022. The data comes from the Superintendency of Banks’ (SB) Annual Report on Banking and Tourism, which also shows a 13.2% year-on-year increase in loans to this industry. It had the lowest financing costs, with a weighted average interest rate of 7.1% (the general average was 12.5% per year).

In terms of risk, it is the third portfolio in the financial system with the lowest delinquency, with only 0.4% of overdue debt and a coverage ratio of 3.4. As a result, credit to this line has grown steadily over the last five years, at an average nominal rate of 9.4%. When loans are separated by currency, it should be noted that 89% of the tourism portfolio is denominated in US dollars, accounting for 25% of the financial system’s total portfolio in foreign currency. Multiple banks account for 93.7% of the tourist credit portfolio. As a result, 90.6% of tourism financing is concentrated in the three commercial banks with the most assets.

Tourism received 6% of bank loans and 11.5% of the private commercial portfolio as of December 2022. Similarly, this line records 19,427 distinct debtors and 25,319 loans in the financial system. According to the report, hotels, bars, and restaurants currently account for approximately 6.2% of the Dominican Republic’s GDP and employ 7.8% of the working population.

 

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Paul Tierney
January 24, 2023 8:14 am

¿How much credit have the banks financed for development of businesses not related directly or indirectly to cash cow tourism? Diversify the economy !!!!