On Dominican Republic The financial burden on households is moderate, with people spending around 17% of their income on housing. debt payment. On the other hand, 20.4% of households are over-indebted.
Over-indebtedness in women it is 19.5% and in men 22.1%this also affects more inactive or unemployed people and single and without children.
Also, over-indebtedness is greater in households with lower incomes due to lack of financial education.
This is revealed by a report by the Inter-American Development Bank (IDB), which highlights that in the country the household debt is equal to 11.5% of gross domestic product (GDP) and indebtedness by people in the labor force or PEA is US$2,142.
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While the average credit per household is US$3,231 and more than 90% of this debt is in pesos and the rest in dollars. However, the DR has lower debt levels than other countries with similar per capita income.
The report “In search of better debt conditions for companies and households” also reveals that although many Dominican households and those in the Central American region reveal that they have no debt, this could indicate that financial inclusion continues to be a medium-term development challenge for countries.
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And this is explained because Haiti, Belize, Panama, Mexico and the Dominican Republic Loans from relatives or friends are especially relevant, equaling or even surpassing the financial system in importance.
The IDB estimates that with the COVID-19 crisis, the over-indebtedness of Dominicans went from be 20.4% to 23.1% (a difference of 2.7%) and that increased to 5.9% debt service at risk.
On the other hand, the indebtedness of Dominican companies is 14.7% as a percentage of GDP.
IDB proposes more access to credit
The IDB study proposes policies to provide access to financing under better conditions, encourage formal savings and debt payment, financial education, clear and transparent information on financial products, and female financial inclusion.
For companies, incentives for timely investment, credit information and training programs, especially focused on female entrepreneurship.
