Financial Crime World

Honduras Banks Face Regulatory Hurdles, Despite Growing Sector

Tegucigalpa, Honduras - The Honduran banking system has experienced significant growth and consolidation in recent years, with total assets reaching $22.8 billion in 2018. However, regulatory requirements for banks operating in the country remain a key challenge.

Regulatory Environment

To set up a bank, operators must meet a minimum capital requirement of L/500 million ($21 million) per CNBS Circular 034/2016. Despite these requirements, foreign investment in the banking sector remains low due to the small size of the market. However, some banks have managed to secure majority foreign ownership, including:

  • Banco Citibank de Honduras, S.A.
  • Davivienda Bank S.A.
  • BAC/Honduras

Regulatory Bodies

The Banking Commission and the Central Bank play a crucial role in overseeing the country’s financial sector. The Financial System law (Decree No. 129-2004) delineates their responsibilities to supervise and regulate the sector, with the goal of bringing Honduran financial regulation into compliance with international best practices.

Key Updates

In 2016, the government updated the Financial Law through Decree No. 160-2016, adjusting its framework to international standards. Additionally, regulations for the Money Laundering Law were approved in the same year.

Key Statistics

  • Total assets in the Honduran financial system: $22.8 billion (2018)
  • Average interest rates for local currency: 13% (2018)
  • Average interest rates in US dollars: 6.9% (2018)
  • Percentage of deposits held in US banks and financial institutions: 50.2%

Business Opportunities

While regulatory requirements may pose a challenge, the Honduran banking sector remains an attractive opportunity for foreign investors seeking to tap into the growing regional market. With its small size and limited competition, Honduras presents a unique chance for international players to establish a foothold in Central America.

Learn More

To learn more about business opportunities in Honduras or connect with trade specialists from the U.S. Commercial Service, visit http://export.gov/usoffices.