15.4% of the commercial credits of the Dominican banks are used to finance the Industrial production, According to the National Banking and Industry report, prepared by the Superintendence of Banks (SB) and published on April 7, within the framework of National Industry Day.
The document highlights that financing to this sector increased RD$4,635 million, for a real year-on-year growth of 11.4% in 2022.
At the end of the year, the manufacturing industry it had 35,811 registered loans, with an outstanding balance of RD$131,738 million, which represented 8.3% of the system’s total portfolio.
“The national industry in the context of the Dominican financial system shows indicators at stable levels and with a favorable outlook, despite the international economic situation. This presents a credit card with positive real growth with an upward trend, historically low delinquency levels, exposure to foreign currency similar to historical levels, low financing rates in relation to other sectors and adequate levels of coverage against payment defaults”, highlights the SB publication.
The financial sector has served as an ally and catalyst for local production. In that sense, the industrial loans They mainly benefited subsectors such as: food and beverage manufacturing (38%), chemical substance manufacturing (14%), furniture manufacturing (9%) and other non-metallic mineral products (7%).
Regarding the type of financial intermediation entity that establishes relations with the industry, commercial banks concentrate 98.4% of the credit portfolio destined for the industrial sector. 86.7% of the total balance is found in four entities: Banco Popular (33.6%), Banco de Reservas (25%), Banco BHD León (22.2%) and Scotiabank (5.9%).
Regarding the cost of financing for the industry, the average rate was 8.9%, close to 1.7 percentage points below the interest rate of the commercial credit portfolio.
In a more segregated way, the financial sector granted an average interest rate to the largest industrial debtors of 8.3%, to medium debtors of 11.5%, to minors of 14.6% and microcredit of 35.4%.
According to the report, in the course of last year the industrial sector increased the level of exposure in foreign currency, going from having 26.7% of its portfolio in us dollars in December 2021 to 38.2% at the end of 2022. This last value is close to the levels observed prior to the start of the pandemic, when foreign currency exposure reached up to 44%.
On the other hand, the report shows that the overdue balance of the industrial sector amounted to RD$756.9 million as of December 2022, showing a downward trend, reducing by 5.5% year-on-year.
As of December 2022, 91.8% of the total portfolio of the sector had an “A” and “B” risk classification. At the end of 2021, that percentage stood at 89.9%.
The level of delinquency of the industrial sector shows a decreasing trend, and is below that registered prior to COVID -19. The indicator stood at 0.57%, its lowest level in the last 5 years.
When comparing the industrial sector with the rest of the sectors, it ranks seventh in delinquency.