Andean Region: Cautious on credit

Andean Region: Cautious on credit

Andean Economy & Policy Corporate & Sovereign Strategy

By Jason Mitchell In Peru, borrowing is easy. The country's expanding middle class often finds itself the target of eager telesales agents proffering yet more credit cards. Mortgages, meanwhile, are also in ready supply in a country where home lending has been growing by 20% a year. The statistics for Colombia also show sharp increases in lending. Rapid economic growth is fuelling easy borrowing. As a proportion of Peru's ballooning GDP, credit today stands at around 32%. In 2005, it was 17% of a much smaller national output. In neighboring Colombia, total credit stands at 34.9% of GDP today, up from 25.2% in 2005. But the surge in credit growth has led to concerns that a bubble coul

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