In order to mitigate the negative financial effects that the COVID19 pandemic is having on Nicaragua, the Superintendence of Banks and Other Financial Institutions (“SIBOIF”) has issued resolutions Nº CD-SIBOIF-1181-1-JUN19-2020 (“Norm for the granting of temporary credit conditions”) and Nº CD-SIBOIF-1181-2-JUN19-2020 (“Temporary norm to reform article 15 of the Norm for Credit Card Operations”).
The first resolution arises in order to establish temporary credit conditions so that financial institutions may grant to debtors of credit cards, vehicle loans, personal loans, home mortgages, microcredits, SMEs, agriculture, livestock, industrial and commercial in all sectors of the economy. Regarding these credits, article three provides that financial institutions may defer and/or extend the originally agreed payment term of the credits. Likewise, the other original conditions may only be modified when they are for the benefit of the debtor.
It is also noteworthy that in accordance with article seven of said resolution, financial institutions may grant initial grace periods of up to six months (of the payment of principal and/or interest) within the term extensions that are granted to debtors. Subsequently, a balloon payment may be made at the end of the credit or redistributed in the rest of the credit period.
We must clarify that the debtors of the financial institutions interested in availing themselves of the provisions from this resolution, will have to submit their application before December 31, 2020. Likewise, only those credits with a credit risk classification of “A” or “B” -as of March 31, 2020- may be submitted. These conditions will not apply to those new credits granted after March 31, 2020.
In addition to these stipulations, the second resolution lowered the minimum payment of the principal balance (plus current and default interest) to be paid monthly by credit card debtors from 3% to 2%. This reduction will have a temporary effect, until March 31, 2021.
Although these resolutions have not yet been published in The Official Gazette, since their issue they entered into force.
We as CENTRAL LAW have an experienced team of lawyers who will be able to advise you in the most diligent and comprehensive manner, in the face of the legal effects that the COVID19 pandemic may have on your company.
If you require more information in this regard, feel free to contact CENTRAL LAW at the following email address: info@central-law.com.
Please remember to observe all sanitary measures in order to take care of yourself and your loved ones.
Avil Ramírez Mayorga
Associate
CENTRAL LAW
Nicaragua
