A financial system on the rise — but for whom?

• Financing provided by the financial system has grown substantially: it rose from 37% of GDP in 2001 to 90% in 2024Footnote 1^[1], the largest increase in Central America.
• Honduras leads the region in consumer credit expansionFootnote 2^[2], with annual growth of 16% between 2010–2023, making it the most dynamic segment of its financial system (Figure 1).
• Consumer credit — excluding credit cards — has driven this growth. Over the past five years, however, credit cards have nearly tripled their growth rate and are becoming increasingly important (Figure 2).
  How do banks fund themselves?

  Since financial intermediation is the core activity of commercial banks, most of their lending resources come from deposits (86% of total liabilities as of August 2025). Of total deposits, 68% come from households, 24% from private firms, and 8% from other sectors.

  As banks have become important channels for remittance transfers, the growing flow of these resources could increase the funds available for lending. Remittances may thus be contributing indirectly to expanding banks' lending capacity. While other factors may also be at play, the evidence preliminarily supports this hypothesis. As remittances from abroad have expanded enormously, household deposit growth has also risen sharply since January 2024, reaching 21% year-on-year in September 2025. At the same time, deposits from firms have slowed steadily over the same period.

  Figure 1A

  Deposit growth by source, 2021–2025 (% year-on-year)

  This visualization is currently only available in Spanish.

  Figure 1

  Loan portfolio of commercial banks by segment, 2010–2025 (millions of lempiras)

  This visualization is currently only available in Spanish.

  Figure 2

  Consumer loan portfolio, 2010–2025 (millions of lempiras)

  This visualization is currently only available in Spanish.

• 76% of funds lent by banks to productive sectorsFootnote 3^[3]—excluding agriculture—goes to large borrowersFootnote 4^[4] (Figure 3), reflecting a preference for clients with stronger collateral and lower perceived risk.
• Close to 90% of the loan portfolio falls in the highest credit-quality categoryFootnote 5^[5]. In microcredit the share is slightly lower (84%), but this reflects the strict thresholds banks apply — which may restrict access and helps explain why this segment accounts for less than 1% of total credit.
• Credit concentration translates into low financial inclusion: in 2024, roughly 9 in 10 Hondurans did not apply for credit; 19% because they did not meet access requirements, and 21% because they viewed debt as too risky (CNBS, 2025).

  Figure 3

  Distribution of credit to productive sectors by borrower size, 2017 and 2024 (% as of December of each year)

  This visualization is currently only available in Spanish.

• The interest rate spread (MIF)Footnote 6^[6] in Honduras is around 8 percentage points (pp), on a downward trend since 2012 (Figure 4).
• Consumer credit may be the main factor sustaining it, with rates at least 16 pp higher than in other sectors (Figure 5)Footnote 7^[7].
• Consumer lending rates are generally higher than those for other usesFootnote 8^[8]; but in Honduras they have been higher on average than in other Central American countries (Figure 6).

• Although Honduras has 15 banks (down from 18 in 2008), just five institutions hold close to 80% of assets, deposits, and the loan portfolio (Figure 7A).
• This pattern is not unique to Honduras. Across Central America, the number of banks ranges from 8 (Nicaragua) to 17 (Guatemala)Footnote 9^[9], and in every country five banks hold around 80% of assetsFootnote 10^[10].
• The presence of regional groups deepens this concentration: in Honduras, 11 of the 15 banks belong to international conglomerates, and 4 of the main players are part of Central American groupsFootnote 11^[11].
• Certain banks dominate specific segments: Banco Atlántida holds 30% of commercial agricultural credit, Banco Popular holds 74% of microcredit, and Banco de Occidente holds 33% of small commercial borrowers (Figure 7B).

A. Distribution of assets, credit, and deposits, 2024 (as of December of each year)

B. Composition of commercial credit, December 2024

• This requires investment, making it essential to redirect more financing toward productive activities in ways that generate stronger, inclusive, and sustainable economic growth. Yet credit expansion has been driven mainly by consumption, while the economy's productive sectors have been left behind.
• To propose concrete solutions, we need to identify which sectors have the greatest potential to raise the country's productivity and understand which would respond most to changes in interest rates and credit availabilityFootnote 12^[12].
• Although Honduras has a level of banking concentration similar to other Central American countries, interest rates are higher and the commercial loan portfolio is concentrated among large borrowers. We need to understand what drives these trends — whether they reflect greater country risk, prudential regulation, the lack of competitiveness in productive sectors, or a lack of competitiveness in the financial sector itself.