Financial Crime World

Guatemala’s Banking Sector Shows Resilience in Face of COVID-19 Pandemic

Guatemala’s credit rating has been boosted by the country’s robust economy and prudent fiscal and monetary policies, according to major global ratings agencies.

Prudent Fiscal and Monetary Policies Boost Credit Rating

The Central Bank’s decision to raise interest rates to 5% in April this year aimed at curbing inflation, which currently stands at 8.32%, is seen as a sign of confidence in the country’s ability to manage its finances.

Strong Banking System

Guatemala’s banking system has also shown signs of strength, with private sector credit rising significantly in recent months to GTQ213,048.90 million in March this year.

  • The Superintendency of Banks (SIB) oversees the financial sector and is responsible for ensuring compliance with anti-money laundering and counter-terrorism financing regulations.
  • The SIB’s Special Verification Intendancy (IVE) and Guatemalan Financial Intelligence Unit are also tasked with preventing illegal activities in the banking system.
  • Guatemala has a total of 18 banks, 11 financial companies, and 14 general deposit warehouses, among other institutions, which together comprise the country’s financial system.

Growth in Banking System

The Banking Superintendence reported that the banking system’s total net assets grew by 11.9% last year to GTQ486,323 million, driven primarily by increases in credits, investments, and deposits.

  • Credit growth was particularly strong for microcredit, with a 46.8% increase.
  • Major enterprises saw an 13.3% rise.

Improved Civil and Commercial Justice System

The country’s civil and commercial justice system is also undergoing significant changes, including the transition to electronic procedures, which aims to improve efficiency and reduce response times.

  • Recent amendments to the Code of Civil and Commercial Procedure are expected to enhance the court system further.
  • Other recent developments in legislation aimed at improving economic and investment conditions include a new Leasing Act, an Act to Promote Investment of Foreign Capital, and a modernized Insolvency Act.

Expertise in Banking and Finance Practice Group

The Banking and Finance Practice Group at Mayora & Mayora, a leading law firm in Guatemala, has extensive experience in counseling clients on financial transactions, secured transactions, and compliance with local regulations.

  • The group’s professionals are well-equipped to advise on investment projects, including structuring contracts, managing risks, and navigating the complexities of Guatemala’s legal system.
  • Local business and legal conditions require specialized knowledge and skills for advising both local and international investors, including structuring contracts, ensuring compliance with banking regulations, and navigating the court system.