During the last six years, the credit portfolio for tourism of multiple banks registered a 127% expansion, going from 42,808 million pesos in 2016 to 97,131 million pesos in 2022, for an accumulated increase of 54,324 million pesos, according to the Association of Multiple Banks of the Dominican Republic (ABA).
In a press release, the ABA explained that, between 2016 and 2022, the relative growth recorded in the tourism portfolio was double the expansion seen in the entire commercial credit portfolio which increased 64%, for the same period.
The Association of Banks reported that an average annual growth of 14.8% was registered in that same period; while it was 8.6% in the commercial portfolio. This means that the tourism portfolio grew 72% faster than the commercial loan portfolio and, as a result of this dynamic, the participation of tourism in the total commercial portfolio went from 8.5% in 2016 to 11.7% in 2022, said the banking union.
When analyzing the post-pandemic years, the ABA observed that banks’ support for the tourism sector became stronger, registering a 178% increase. It specified that between 2020 and 2022 tourism credit grew on average 13,326 million pesos, compared to the average increase of 4,782 million pesos that this sector had registered in the period 2016 -2019.
“The figures indicate that Dominican multiple banks have shown confidence in the tourism sector, even in the most difficult times such as the pandemic and, as such, have been a key ally in the recovery and development of this industry,” the ABA emphasized in a press release.
The association valued the multiplier effect of tourism in the economy, given the link of productive chains that drive MSMEs and generate jobs in numerous related sectors, such as construction, transport, agriculture or telecommunications. Tourism also has the potential to boost infrastructure development in tourism destinations, which also benefits the rest of the real economy.
“Increasingly, multiple banks are aware that more tourism equals more growth, more employment, more foreign exchange and more investment, which benefits Dominican households and MSMEs,” the banking association said.
Under this premise, the ABA guaranteed that tourism will continue to find support from the banking sector for the challenges ahead, providing credit and other financial services to companies and projects of the so-called “smokeless industry”.
Impact of tourism on the economy
On the other hand, the Association of Banks pondered the importance of tourism as an economic and social activity at a global level, since, according to data from the World Tourism Organization in 2019, this sector accounted for 4.1% of world GDP.
It emphasized that, for some emerging countries, such as the Dominican Republic, tourism is a fundamental industry that represented 5.3% of GDP in 2021 and reached a peak of up to 8.0% of GDP in 2007.
Likewise, the guild highlighted that in 2022 tourism revenues totaled 8,407 million dollars, equivalent to 22% of total foreign exchange earnings (39,000 million dollars).
Source:
Diario Libre
