New Consumer Protection Country Profile – Venezuela

> Posted by Kelley Mesa
venezuelaThe latest edition to the Consumer Protection Library provides an overview of the legal and regulatory for consumer protection in Venezuela as well as a description of the banking associations and microfinance networks there.
Here’s the executive summary:
Venezuela has one of the strongest economies in Latin America. In terms of GDP, it ranks among the top 40 in the world. Venezuelan banks have been subject to intense regulation in arenas ranging from interest rate caps to mandatory minimum amounts for microfinance loans. The presence of few microfinance institutions and high market concentration results in weak competition. Additionally, microfinance must compete with heavily subsidized public programs, the latter of which can offer interest rates 6%-8% lower than private or not-for-profit programs. The growing trend towards regulation and nationalization means the presence of similar public programs will likely increase. Venezuelan law calls for strict regulation of financial institutions in the area of consumer protection. However, the extent of the regulation and government intervention, as well as the threat of nationalization, dissuades private sector players from providing services.

  • Consumer protection law contains strict clauses regarding financial services in the areas of transparency, usury and false advertising.
  • The Venezuelan Banking Association has a powerful ethics committee.
  • New licenses for banks have been frozen and it does not seem likely that more will be granted in the future.

> Read more about consumer protection in Venezuela
> Check out all the country profiles in the library