Social Responsibility
Social Impact
Banco La Hipotecaria is a fully-regulated and licensed banking institution with its headquarters and primary operations in the Republic of Panama and subsidiary operations in El Salvador and Colombia. (henceforth, Banco La Hipotecaria and its subsidiary operations, “La Hipotecaria”).
Although La Hipotecaria is licensed to engage in all types of lending activities, since the beginning of operations in May of 1997 and to date, it has chosen to limit its lending activities exclusively to the granting first-mortgage loans on homes that are occupied as primary residences of its borrower clients in particular lending niche that will be described in greater detail (henceforth the “Market Niche”). In select cases, La Hipotecaria also grants personal loans to facilitate the obtention of a mortgage loan, but it only grants personal loans to its mortgage clients and personal loans comprise less than 7% of total assets. La Hipotecaria does not grant auto loans, credit card loans, or any type of consumer or commercial loan that is not described in this document. La Hipotecaria has never provided mortgage financing for the construction of homes or the purchase or refinancing of second homes, vacation homes or residential properties to be leased as investments.
The shareholders, directors and executives of La Hipotecaria believe in the vital social impact that housing plays, particularly in the developing countries where La Hipotecaria operates. Homeownership and the repayment of a mortgage loan create a family patrimony that in most cases would not be possible through other means. Furthermore, the minimum basic standards required for the homes that La Hipotecaria finances ensures that the homes will serve to protect its clients´ health and safety, and indirectly facilitate the education of their children. Finally, mortgage lending that facilitates the possibility of homeownership lowers a population´s receptivity to the radical socialist political agendas that have been very harmful to neighboring countries.
Whereas in developed countries mortgage financing is widely available across nearly all social-economic income sectors, this is not the case in the countries where La Hipotecaria operates. Lending institutions focus their efforts on granting mortgage loans to upper-middle and upper-income borrowers where they are able to cross-sell other banking services not required by middle and middle-lower-income sectors, thus limiting the options to obtain housing finance.
By specializing in their lending niche, La Hipotecaria has taken numerous steps to simplify the process of obtaining a home mortgage which can be overwhelming for many first-time buyers in its market niche. To originate its mortgage loans, La Hipotecaria utilizes its own in-house sales force, referred to as mortgage advisors (asesores hipotecarios) that are full-time salaried employees of La Hipotecaria whose compensation does not include a variable monetary incentive for the number of mortgage loans originated. Rather their efforts are on helping and educating the client. Complementing the efforts of its mortgage advisors, La Hipotecaria continues to be a regional pioneer in providing simplified online digital tools to assist clients in understanding and qualify for a mortgage loan. By combining these on-line digital tools and the assistance of its mortgage advisors, La Hipotecaria is able to recommend a mortgage loan that is appropriate for that person’s particular personal situation and income level.
Special care is taken to make sure that borrowers do (or will), occupy the home as their primary residences and that borrowers belong to the Market Niche. Not only are these elements key to its lending philosophy to ensure social impact, but it must do so to comply with lending covenants related to the many international developmental banks and impact funds.
The lending efforts of La Hipotecaria and its positive social impact have been recognized and supported by many of the world´s most prestigious multilateral lending organizations and impact funds.