Nicaragua Diagnostic Review of Consumer Protection in Financial Services : Volume 1. Key Findings and Recommendations
In 2010, over 92 percent of the assets in the Nicaraguan financial system were concentrated in the banking sector, while microfinance managed over 5 percent, and all the remaining segments covered less than 3 percent. Starting in the late 1990s and...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/718931486628083729/Key-findings-and-recommendations http://hdl.handle.net/10986/26124 |
| Summary: | In 2010, over 92 percent of the assets
in the Nicaraguan financial system were concentrated in the
banking sector, while microfinance managed over 5 percent,
and all the remaining segments covered less than 3 percent.
Starting in the late 1990s and until 2007, the microfinance
sector in Nicaragua has expanded robustly at 20 percent
average annual growth rate and has been a significant factor
of economic growth, particularly in the agricultural small
and medium enterprise (SME) sector. The 2008 financial
crisis led to a rapid deterioration of the microfinance
credit portfolio and the microfinance lending contracted by
nearly 20 percent in 2009. While partly this was due to
spiking interest rates, over indebtedness and slowing
demand, research has shown that inadequate consumer
protection and low financial literacy in the microfinance
sector also played a role. In order to improve Nicaraguan
consumers’ confidence in their financial institutions, this
World Bank’s diagnostic review presents strengthening
consumer protection in five key areas. Volume I of the
review summarizes the key findings and recommendations and
volume II provides a detailed assessment of the Nicaraguan
consumer protection institutional, legal, and regulatory
framework compared to the good practices for three financial
segments, namely banking, nonbank credit institutions, and
insurance. Volume II also includes an annex that analyzes
the results of a field research with financial consumers in Nicaragua. |
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