Belize: lending & credit regulation

Who regulates

• Central Bank of Belize

  Primary supervisor for domestic banks, financial institutions, and credit unions; issues prudential directives on lending and provisioning.

  ^{[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24]}

• International Financial Services Commission

  Regulates international money lenders offering short-term, unsecured loans to non-residents.

  ^[25]

Core laws & rules

• Domestic Banks and Financial Institutions Act (Undated (referenced in 2013-2023 directives))

  Governs domestic banks and financial institutions, including single-borrower exposure limits and prudential requirements.

  ^{[1][8][10][13][18][19][20]}

• International Banking Act (Amended 2023)

  Governs international banking licensees, including single-borrower limits and prudential standards.

  ^{[2][3][4][5][14][15][21][22][23][24]}

• International Money Lending (Short Term and Unsecured Small Loans) Regulations (2008)

  Regulates international money lenders offering short-term, unsecured loans up to $5,000 to non-residents.

  ^[25]

Licensing & registration

• Domestic Banks and Financial Institutions

  Licensing under the DBFIA is required for domestic banking activities; the CBB supervises these entities.

  ^[1]

• International Banking Licensees

  Licensing under the IBA is required for international banking activities; the CBB supervises these entities.

  ^[2]

• International Money Lenders

  Licensees must maintain minimum capital, conduct underwriting and operations primarily within Belize, and offer loans exclusively to non-residents. Capital: Minimum capital required (amount not specified in source) Timeline: Regulations issued 2008

  ^[25]

• Credit Unions

  Supervised by the Registrar of Credit Unions at the CBB; subject to asset classification and provisioning requirements.

  ^{[9][11][16][17]}

Restrictions & warnings

• Single borrower exposure limits are capped at 25% for both domestic and international banks, with existing exposures managed under transitional directives.

  ^[1][2][3]

• Licensed banks are prohibited from acquiring assets for sale from borrowers in exchange for settling indebtedness.

  ^[24]

• Loans ninety days or more in arrears must be placed on a non-accrual basis.

  ^[19][22]

• International money lenders must offer loans exclusively to non-residents.

  ^[25]

Direction of travel

• Regulatory focus remains on prudential stability, with recent amendments to single-borrower limits and alignment of provisioning standards with international practices like IFRS 9.

  ^[3][6]

Sources

1. DBFIA Practice Direction No. 8: Treatment of Exposures Previously Granted Approval under Section 57(2) · 2023-10-31
2. IBA Circular No. 6 of 2023: Treatment of Exposures Previously Granted Approval under Section 21(B)(2) · 2023-10-31
3. International Banking (Amendment) (No. 2) Act, 2023 · 2023-08-02
4. IBA Circular No. 1 of 2020 - Classification of Loans and Other Assets for Banks · 2021-03-05
5. IBA Circular No. 2 of 2020 - Loan Loss Provisions and Reserves · 2020-07-27
6. DBFIA Practice Direction No. 3 Amendment (27 Jul 2020) · 2020-07-27
7. Direction No. 12B/2019 - Fully Cash Secured Credit to Non-Resident Belizean Nationals · 2020-03-25
8. DBFIA Practice Direction No. 2 Amendment (20 Mar 2020) · 2020-03-20
9. CUA Requirement No. 1/2020: Classification of Loans and Other Assets · 2020-03-20
10. DBFIA Practice Direction No. 2 Amendment (30 Sep 2019) · 2019-11-21
11. CUA Requirement No. 1/2019: Classification of Loans and Other Assets · 2019-11-21
12. DBFIA Practice Direction No. 3: Loan Loss Provisions and Reserves · 2018-11-01
13. DBFIA Practice Direction No. 2: Classification of Loans and Other Assets · 2018-11-01
14. IBA Circular No. 1 of 2018: Classification of Loans and Other Assets for Banks · 2018-11-01
15. IBA Circular No. 2 of 2018 - Loan Loss Provisions and Reserves · 2018-11-01
16. CUA Requirement No. 2/2013: Allowance for Loan Losses and Impaired Assets · 2013-05-15
17. CUA Requirement No. 1/2013: Classification of Loans and Other Assets · 2013-05-15
18. DBFIA Practice Direction No. 2: Classification of Loans and Other Assets · 2013-03-26
19. DBFIA Practice Direction No. 4: Treatment of Interest on Loans and Other Interest-Bearing Assets · 2013-03-26
20. DBFIA Practice Direction No. 3: Loan Loss Reserves · 2013-03-26
21. IBA Circular No. 1 of 2011 - Classification of Loans & Other Assets, 2011 · 2011-11-09
22. IBA Circular No. 3 of 2011: Treatment of Interest on Loans and Other Interest-Bearing Assets · 2011-11-09
23. IBA Circular No. 2 of 2011: Loan Loss Reserves · 2011-11-09
24. IBA Circular No. 5 of 2011 - Requirements for Assets Acquired for Sale · 2011-07-20
25. International Money Lending (Short Term and Unsecured Small Loans) Regulations 2008 · 2008-07-26