Banks granted 2,132 loans to Dominican tourism in the last year

Government projections establish that the Dominican Republic will receive 10 million tourists in 2023. Between January-May of this year alone, 3,379,392 tourists arrived, 16.4% more than the 2,902,282 in 2022 and 13% more than the 2,988,155 in 2019. These mobilizations boost the local economy.

The Central Bank (BC) states: RD$5,276.2 million tax revenues related to the travel and tourism industry between January-April 2023. The resources destined by the local banks to the so-called non-smokestack industry increased by 5.3%, going from RD$89,492 million as of May 2022 to RD$94,249 million in the same month of 2023. This means RD$4,757 million disbursed through 2,132 new loans, according to the Superintendency of Banks (SB).

Loans increased from 23,772 to 25,904, with a weighted average interest rate of 8.05%. Given this situation, the banking system observes the behavior of one of the pillars of the economy, especially for its investment potential. As of May 2017, commercial banks recorded 28,335 loans granted for an amount of RD$45,309 million.

Between May 2018 and May 2019, loans went from 26,177 to 24,486, meaning that 1,691 loans were paid off. During that period, the balance owed went from RD$48,322 million to RD$55,813 million. This is equivalent to a difference of RD$7,491 million.

During the pandemic, the banks implemented easing measures to allow companies to continue their operations and guarantee jobs. As of May 2020, the balance owed to the lodging and food services line was set at RD$64,175 million for 23,516 loans.

As of May 2021, the financial system granted 13,135 loans for a total disbursement of RD$13,135 million. According to the data, the cumulative amount amounted to RD$77,310 million.

Banking portfolio

Dominican banks play a key role in the development of tourism by financing hotel projects and food businesses. If one analyzes the loans granted, which amounted to 5,826,975 as of May 2023, it is evident that lodging and food services represent only 0.4% of the total. That is, 25,904.

The SB establishes that 86.6% of the loans granted are for the consumption of goods and services (5,051,572), followed by 304,503 for commerce and 129,021 for home remodeling.

Foreign capital

As of March 2023, the Ministry of Tourism (Mitur) registers 99,609 rooms in real estate properties, that is, short term rentals, compared to 83,041 rooms in all-inclusive tourism. In fact, the vice president of the National Association of Hotels and Restaurants (Asonahores), Andres Marranzini, projects the construction of 4,000 hotel rooms during this year, an action that will allow to welcome more foreign tourists and non-resident Dominicans.

The Dominican Republic continues to attract foreign capital due to the legal security, the investment climate and the policies aimed at the socioeconomic development of the 11 million Dominicans. This is evidenced by the growth of foreign direct investment (FDI) during the last seven years.

In the first quarter of 2023, the Dominican Republic Export and Investment Center (ProDominicana) counts an investment of US$271.9 million directed to tourism. Analyzing from 2017 to 2022, a total amount of US$5,482 million of foreign capital destined to tourism is evident, with 2022 capturing the highest investment, reporting US$1,001 million, followed by 2019 with US$994 million and 2021 some US$975 million. Meanwhile, 2017 was set at US$704 million; 2018, US$854 million and 2020, US$954 million.

Economic sectors with loans

The real estate sector has 63,533 loans as of May 2023, followed by community services (60,578), manufacturing (39,634), agriculture and livestock (38,802), household activities as employers (34,624), transportation and storage (24,913), and construction (22,128).

According to the data, fishing totaled 675 loans; activities of extraterritorial organizations and bodies, 791; mining and quarrying, 1,349; electricity supply, 2,342; education, 3,321; public administration and defense, 4,611; services related to human health, 6,951; financial and insurance activities, 11,723.

Source: Eldinero.com

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Dominican Republic Live Editor

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