The number of mortgages classified as “yellow alert” in Peru jumped last year, a sign that many borrowers appear to be having trouble honoring their loan commitments, according to risk agency Sentinel.
Financial daily Gestion reported Sentinel saying that in November there were 41,631 mortgages on alert, which is 69 percent higher than at the end of 2011. In total, there are 190,552 mortgages in Peru, according to Gestion.
The number of mortgages that have been classified in the “red alert” category has increased 20 percent, Sentinel said. A mortgage is classified as “red alert” if there have been significant delays in payments.
Yanina Caceres, a business director at Sentinel, said that banks are being too aggressive in awarding credit. “They should be careful in calculating the [credit] quote for the month versus the payments,” Cacers said.
In recent years, Peru has seen a boom in the retail market. Prices for apartments and houses in the capital Lima have skyrocketed as economic growth has translated into a larger middle class with demands for consumer credit.
While some analysts and economists have started to warn of a possible housing bubble developing in Peru, the country’s delinquency rate still remains one of the lowest in Latin America.
Banking association Asbanc says Peru’s delinquency rate at the end of last year was 1.75%, which is up 0.28 percentage point from the end of 2011.
