Online Lending in Honduras: A Regulatory Overview

Regulation of Online Lenders

Honduran law does not differentiate between traditional supervised financial institutions and non-banking lenders when it comes to regulations for loans provided to different entities. However, there are distinct requirements for each type:

• Supervised Financial Institutions: Must comply with banking regulations issued by the National Banking and Insurance Commission.
• Non-Banking Lenders: Subject to usury provisions and reporting requirements.

Underwriting Process

As of February 2024, Honduran regulations do not specify a required underwriting process for online lenders.

Sources of Funds for Loans

The primary sources of funds for loans vary between supervised financial institutions and non-banking lenders:

• Supervised Financial Institutions: Obtain funds from deposits and lender-raised capital.
• Non-Banking Lenders: Obtain funds from their own capital and lender-raised capital.

Syndication of Loans

Syndications of loans are permitted in Honduras, following the same guidelines as regular loans.

Payment Processors

Payment processors must use existing payment rails, but they can create or implement new payment rails prior to authorization by the Honduran Central Bank. Currency management for remittances is governed by specific provisions, and there is a security tax applicable to foreign transfers.

Fund Administrators

Fund administrators are regulated depending on their activities by the Securities Market Law. Fund advisers cannot impose conditions on fund administrators that contravene investment rules.

Marketplaces, Exchanges, and Trading Platforms

Online marketplaces for general goods and services are permitted, but regulations regarding public-private security offerings apply if they include securities. Financial institutions must comply with regulations related to asset weighting, credit portfolio management, and managing assets received in payments due to loan defaults.