Assessing the effects of recent provisioning rules on consumer credit allocation in Colombia

by Diego Cuesta-Mora, Fredy Gamboa, Camilo Sanchez-Quinto Colombia’s post-pandemic recovery in 2021–2022 was marked by rapid consumer credit growth, followed by deteriorating credit quality indicators amid tightening financial conditions. In January 2023, the Superintendence of Finance of Colombia (SFC) introduced higher provisioning requirements for long-term consumer loans to enhance financial resilience against credit risk materialization and to help moderate the rapid expansion of consumer credit observed prior to the reform. From the perspective of credit institutions (CIs), increased pro