Poll: 36% of banks say credit approval for small and medium-sized businesses has decreased

SANTIAGO. - A recent poll on General Conditions and Standards in the Credit Market performed by the Central Bank in March of this year has indicated that a significant percentage of banking institutions in Chile are maintaining restrictive credit-approval conditions.

According to the survey, 36% of banks said that credit approval for small and medium-sized businesses has been restricted.  The main reason for this is the negative perception of the current economic situation and of client’s credit risk.

As a result, the margins between the base cost of commercial credit and the premium required for the riskiest credit have increased, along with down payment requisites.  Credit terms have decreased, albeit to a lesser extent.

Additionally, 48% of the banking institutions believe that approval standards have become more restrictive for mergers between large companies.

Regardless, the credit demand on the part of companies continues to be at level similar to that reported during the previous trimester.