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Access to credit in Guatemala

Consumer needs and business opportunities can be identified both nationally and locally. Access to credit in Guatemala tends to be highest in the southwest, nearest the Pacific coast and the country’s political and economic centre, including Guatemala City (figure 1). Banks play a fairly minor role in providing credit to Guatemalans, whatever their income (figure 2). Most borrowers in all income groups obtain credit through informal sources such as friends, relatives and neighbours.
Click on the maps for a higher resolution version.
Figure 1. Market heat maps for access to credit in Guatemala
Share of households living on more and less than $2 a day with access to credit, by department, 2000 (%)

Source: Instituto Nacional de Estadística de Guatemala

Such patterns can reveal opportunities to expand existing credit services or to provide new ones to people outside the market—though maps and figures are only a first step. To build a business case, more research is needed on what is behind these access patterns.

A closer look at the actual use of credit in Guatemala provides more information and might strengthen the case for a business opportunity. While only 19 percent of urban borrowers living on above US$2 a day use their loans for investment rather than consumption, 55 percent of rural borrowers living on less than US$2 a day invest their loans in agricultural and other business (figure 3). If formal credit is expanded for the rural poor and the distribution of spending remains the same, the loans will most likely be invested rather than consumed.

Figure 3. Opportunity: Estimates of the use of credit in Guatemala among households living on less or more than $2 a day (2000)

Again, more detailed context-specific analyses are required to understand credit demand among the poor. But the market heat maps offer useful signposts towards a better knowledge of these markets.