News Two

Colombian borrow for increasingly longer periods

Today 40 percent of such loans are taken with a term exceeding five years.

The ordinary expense of Colombians every day finances in the longer term , and proof of this is that until the end of 2013 the majority of consumer loans that people asked the banks , 40.5 percent will be paid more five years, while in 2005, only 8.4 percent were agreed to that term .

Last year it was also decided that another important part of those same loans , 39.9 percent would be paid three to five years, which amounts to about 80 percent concentration of consumer loans , other than cards credit , which will be canceled for a longer term , when in 2005 it barely reached 52 percent , according to statistics of the financial system .

While this , at first glance , would have more problem, the Central Bank itself notes that this trend , financial institutions are exposed to greater risk , to the extent that , at any time, the economic situation and debtors can change affecting the quality of the portfolio.

Daniel Castellanos , vice president of the Bankers Association ( Asobancaria ) , notes that it has been a modest increase amidst lower dynamics of consumer credit, which grew very fast in 2012 but was halted last year.

In the same address Gerardo Hernández , financial overseer , who said that while households have increased their credit somehow ( consumer ) and deadlines, it is noteworthy that those loans are being used today for many more activities are delivered before were financed only with microcredit. They are no longer exclusive to recurrent expenditure .

"There is a marginal increase in the time ; monitoring is being done to this phenomenon, but we're hoping to look at what happened in December to see if the situation is worrisome and warrants further action ," the official said.

What reassures the authorities is that this situation occurs at a time when the growth of the consumer portfolio is at sustainable levels. Until November 2013 was 10.1 percent annual real, when a year ago it was around 15 percent, after inflation .

In turn, the ' hanging ' consumer debt rose only 6.54 percent in real terms for the same month, while in November 2012 the rate was 24.6 percent , which in the opinion of Hernandez denotes a substantial improvement the quality of these loans.