Credit to companies is gaining momentum and grew by 12.3% in the last 3 years

Credit to companies is gaining momentum and grew by 12.3% in the last 3 years

He corporate credit ended 2023 with a stock of 12.83 billion dollars and accumulated growth of 12.3% in the last 3 years, according to a report by the consulting firm Exante that uses data from the Central Bank of Uruguay (BCU).

The stock of credit to companies began to gain momentum in 2021 and improved steadily, until achieving a 12% improvement last year, driven by agribusiness and the construction.

Corporate credit represents 16% of the country’s GDP, which is a low percentage in international comparison, only surpassing Argentina, where is 5%. However, it is below Brazil (twenty-one%), Colombia (22%), Peru (25%), Mexico (27%), Paraguay (37%) and Chili (fifty%). The distance is more noticeable with the European Union (75%) and USA (76%).

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The role of BROU and private banks

The Exante report specified that the private banks They concentrate 75% of credit to companies and show an improvement of 10.6% since 2021. The Republic Bank (BROU), which concentrates 25% of the market, remained even more dynamic, with an increase of 12.9% in the last 3 years and almost doubling the improvement in 2023.

On the other hand, credit remains strongly dollarized, concentrating 78% of the total, compared to 22% of operations in national currency, although both grew. In any case, the granting of new credits to companies is less dollarized than before the pandemic, Exante indicated.

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The operations of MSMEs and the importance of agribusiness

Although large companies concentrate the majority of new transactions and grew by 13% last year, medium-sized companies increased their loans by 16% and MSMEs were the ones that grew the most, with 24%.

Although the stock increased in all sectors of activity, with the exception of industry, The construction stood out, although the agribusiness They surpass it in balance.

Meanwhile, loans with guarantees SiGa They are still a small portion of the total, but they showed great dynamism in 2023 and are at levels much higher than the pre-pandemic, something linked last year to the bonuses for the agricultural emergency.

Finally, Exante evaluated that 2022 and 2023 “were years of higher funding costs for the Uruguayan companies”, especially in dollars due to the rise in international rates, but warned that “this pressure will be reversed this year” and noted that “with spreads already very compressed, this could take time to be reflected in lower active rates.”

In turn, the consulting firm observed that a large proportion of companies operate with zero or very low indebtedness, Therefore, he concluded that there are “many opportunities for leverage.”

Source: Ambito

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