ColombiaDownload Full Scorecard
Goal – An efficient, transparent financial sector that provides a broad range of citizens with access to multiple forms of competitive credit so that they can start businesses, build wealth, and purchase property
Core Question: Are traditional banking services robust and extensive enough to serve the needs of the population to help them build wealth and purchase property? Yes – Strong – Colombia scores highly on the ease to obtain loans and there are a large number of highly regarded micro-financing options available.
How easy is it to obtain a bank loan? Yes, Strong – Ranking 54th out of 144; Score 3.09 out of 7 Trend↑
Source: The Global Competitiveness Report 2012-2013, World Economic Forum
How sound are the country’s banks? Yes, Strong – Ranking 42nd out of 144; Score 5.65 out of 7, Trend↓
Source: The Global Competitiveness Report, 2012-2013 World Economic Forum
Status – Strong, numerous 3 or 4 diamond rated microfinance institutions operating in the country relative to the population and poverty levels.
126.96.36.199 Microfinance allows citizens without traditional creditworthiness to build a credit history. How many microfinance institutions are operating in the country? 41
Banco Caja Social www.bancocajasocial.com
188.8.131.52 What is the number of active borrowers per institution?
Banco Caja Social 625,546
Banco WWB 231,699
Source: Microfinance Information Exchange www.mixmarket.org/mfi
Core Question: Are entrepreneurs free to raise capital outside the banking system including venture capital and/or by issuing stock in a well-regulated stock exchange? Yes – Strong – There is limited government control of financial services and venture capital is fairly readily available. It is also easy to raise equity through the stock market.
2.2.1 How much control does the government exert over financial services?
Strong -Score 70 out of 100 – Limited government control Trend↑. Foreign investment receives national treatment, and 100 percent foreign ownership is allowed in most sectors. Private institutions dominate the growing and well-capitalized financial sector.
Source: 2013 Index of Economic Freedom, Heritage Foundation, www.heritage.org/index/Country/Colombia
2.2.2 How easy is it for entrepreneurs to find venture capital?
Strong – 53rd out of 144 Trend↑; Score 2.82 out of 7
2.2.3 How easy is it to raise money by issuing shares on the stock market? Strong – 52nd out of 144 Trend↑; Score 3.78 out of 7
Source: The Global Competitiveness Report 2012-2013, World Economic Forum http://www.weforum.org/issues/competitiveness-0/gci2012-data-platform/
Core Question: Is comprehensive credit information available through public and private credit bureaus? Yes – Strong – There is significant access to credit information through private credit bureaus, but no public credit bureau exists.
Overall Ranking 70th out of 185 in 2013 – Strong Trend ↓
2.3.1 What is the depth of information available in credit bureaus? Very Strong – Score – 5 out of 6 with a higher number indicating more information is available
2.3.2 What is the extent of public credit registry coverage? 0% – Very Weak
2.3.3 What is the extent of private credit registry coverage? 72.5% – Very Strong
Source: Doing Business 2013 – Getting Credit, World Bank
In-Country Assessment Information
FQ4 How available are mortgage loans for purchasing commercial property (office, retail, industrial and logistics), who is the typical user and what are the prevailing trends?
Currently the mortgage loan and is given primarily to Colombian nationals. In most of the cases there is no seller financing. Direct financing for foreigners is not available in Colombia. Some banks evaluate the possibility of a mortgage loan for you as a foreigner if:
1- You are married to a Colombian national
2- You have been living in Colombia for more than six months
3- You plan to buy a primary residence and not as second home
4- You already have a local bank account
FQ5 What are the interest rates, term and loan-to-value ratios?
Currently the mortgage loan rate for real estate in Colombia is between 15-18% annually. This type of loans is short term, usually 5 to 15 years, and is made primarily given to Colombian nationals. The loan-to-value ratio limit is set at 70%.
FQ6 Are there any informal barriers to borrowing such as for women or minorities?
Direct financing for foreigners is not available in Colombia.