The Colombian economy felt the effects of a slowdown in the first semester of 2023 due to a restrictive monetary policy, compounded by a significant increase in interest rates at the end of 2022. This caused credit card interest rates to rise above 40%, leading to consumer concerns and reduced credit card usage, impacting overall consumption.
Informal credit is a significant challenge in Colombia, impacting individuals and small businesses. To promote financial inclusion, efforts are being made to facilitate access to credit through faster and more accessible processes.
In 2023, mortgages are poised to encounter a deceleration in disbursements due to the mounting cost of living and soaring interest rates, deterring potential homebuyers. For many Colombians, assuming long-term debt under such circumstances has become an impractical option.
The Buy Now Pay Later (BNPL) trend is gaining popularity in Colombia, offering appealing benefits like immediate approval, minimal requirements, and the option to pay in three interest-free instalments, with the possibility of additional instalments with interest charges. This alternative is popular across various categories, including apparel, home improvement, technology, and health treatments.
Over the forecast period, consumer caution is expected to lead to a slowdown in the growth of credit card transactions and value. High interest rates are likely to persist due to inflationary pressures and an uncertain political landscape, eroding consumer confidence.
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Understand the latest market trends and future growth opportunities for the Consumer Lending industry in Colombia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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Consumer Lending
Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.
See All of Our DefinitionsThis report originates from Passport, our Consumer Lending research and analysis database.
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