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Peruvian banks expected to increase lending by 8% in 2017

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Peruvian banks expected to increase lending by 8% in 2017

Peruvian banks are expected to increase lending by 8% in 2017, nearly double the 4.4% lending growth rate seen in 2016, according to Peruvian banking association Asbanc.

The stronger lending growth rate should come on the back of improvements in several key macroeconomic areas, Asbanc believes. Domestic demand, it estimates, should grow by 2% in 2017, which compares to just 1% growth in 2016.

The forecast takes into account the impact of the Brazilian construction firm Odebrecht leaving the country, Alberto Morisaki, Asbanc's Manager of Economic Studies, said according to a Gestión report.

Earlier in the week, Peruvian President Pedro Pablo Kuczynski ordered Odebrecht to dismantle its operations in the country and sell its projects. In December 2016, Odebrecht struck the largest anti-corruption settlement in history and admitted to Brazilian, U.S. and Swiss prosecutors that it had paid almost $1 billion in bribes in 12 countries.

Asbanc had estimated the lending growth at 10% for 2017 before the news of the scandal broke.

During 2016, lending to households grew 5.9%, while lending to companies grew 3.7%, according to Asbanc.