The current interest rates for loans to companies have reached levels not seen for six years.

An article in Nacion.com reports that “Business are facing real interest rates ranging from 11% to 13%”, with “real rates” defined as “the nominal amount, announced or offered by entities, minus inflation.”

This situation particularly affects SMEs who not only pay the highest interest rates on the scale, but whose financing is the fourth largest factor in terms of affecting their competitiveness, whereas for large companies the cost of financing is not regarded as an important factor.

Max Soto, director of the Research Institute in the Economic Sciences at the University of Costa Rica, points out the reasons have led to this situation of the high cost of borrowing for businesses:

“One, is that the private sector is demanding more resources to produce as well as the government which needs to cover its excess in expenses compared to income, while the Central Bank is maintaining a restrictive policy, with the aim of keeping inflation low and stable. Second, liquidity (the resources available in the short term) in colones has decreased its growth rate since October 2011, and third, public banks, in particular the Banco de Costa Rica, have maintained a very aggressive policy of credit expansion, funded, fundamentally , with term deposits which is putting upwards pressure on passive (savings) rates.”

Source: Nacion.com