In a recent report, the Federal Reserve Bank of New York (Fed-NY) reported that the demand for credit among small and medium-sized businesses in Puerto Rico after Hurricane Maria barely reached 30%.
According to the data recorded by the Office of the Commissioner of Financial Institutions (OCIF), since before the devastating hurricane, banking has registered a reduction in commercial loans on the Island.
In Puerto Rico, in the last year, the business sector has faced greater challenges after the hurricanes, which are added to the symptoms of recession, the loss of population, the disappearance of jobs and the increase in costs due to higher taxes consumption.
This has upset the economy in general and the banking institutions, although they have made their adjustments and confirmed capital improvements.
In September, the Fed concluded that in 71% of the cases analyzed for its report on the situation of the Island, local companies recorded lower revenues after the hurricane, 66% had higher expenses and 48% had to resort to indebtedness to stay afloat. Among those who registered damages, only 22% requested financing and mostly with sums around $ 100 thousand.
In the case of commercial loans guaranteed with real estate, the trend has not been different. In 2008, these reached figures of $ 39,891 million and at present the figure is $ 21,951 million, for a reduction of 45%.
Analysts of the industry assure that even when this decline begins to intensify in 2008 and this is revealed by the recorded data, it probably started much earlier, but the greater effect became noticeable in later years.