Countries › Panama › Guide › 10. Capital markets and finance › Consumer credit in Panama: finance company licences, effective rate disclosure, no interest on interest and the seven year credit bureau rule

Consumer credit in Panama: finance company licences, effective rate disclosure, no interest on interest and the seven year credit bureau rule

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Last verified: 2026-10-29 · Status: Stable

Non bank lenders that offer loans to the public (empresas financieras) need authorisation from the Ministerio de Comercio e Industrias, B/.500,000 of paid capital and must disclose the effective interest rate; capitalising interest is prohibited. Banks set rates freely but must also show the effective rate. Credit bureaus need a MICI authorisation, and credit history data is purged seven years after the last payment.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar and that the dollar circulates without restrictions in commercial and financial transactions (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Minimum paid capital of a non bank finance company	500000 PABLey 42 de 2001 art. 28, as of 2026-10-29 · in force
Annual supervision fee of a finance company	750 PABLey 42 de 2001 art. 17, as of 2026-10-29 · in force
Capitalisation of interest by finance companies	Prohibited textLey 42 de 2001 art. 25-A (Ley 33 de 2002), as of 2026-10-29 · in force
Credit history data retention	7 years after last paymentLey 24 de 2002 art. 26 (Ley 14 de 2006), as of 2026-10-29 · in force
Interest rate ceiling for bank loans	None textDecreto Ejecutivo 52 de 2008 art. 79, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos); Ley 84 de 1904 art. 1, as of 2026-10-29 · in force

The rule

1. Natural or legal persons that offer the public loans or financing in money are empresas financieras under Ley 42 de 2001; the Dirección de Empresas Financieras of the Ministerio de Comercio e Industrias licenses, supervises and sanctions them. Banks, insurers, cooperatives and savings and loan associations are outside this law.Ley 42 de 23 de julio de 2001, arts. 1, 4, 2001-07-23 official text · verified 2026-10-29

2. A finance company must have a minimum paid capital of B/.500,000, fully subscribed and paid in for companies.
Cost to do it: B/.500,000 (US$500,000) of paid capital.Ley 42 de 2001 (as enacted), art. 28, 2001-07-23 official text · verified 2026-10-29

3. The authorisation fee is B/.1,000 and the annual supervision fee B/.750.
Cost to do it: B/.1,000 (US$1,000) once, then B/.750 (US$750) a year.Ley 42 de 2001, art. 17, 2001-07-23 official text · verified 2026-10-29

4. Loan contracts must state the effective interest rate applied, whatever the calculation method, and may not use methods that capitalise interest directly or indirectly; charging interest on interest is expressly prohibited.Ley 42 de 2001 arts. 25-A and 30 as added and worded by Ley 33 de 2002, arts. 25-A, 30, 2002-07-04 official text · verified 2026-10-29

5. Unauthorised lending to the public: refusal to show books is fined up to B/.25,000 and the Ministry may intervene and seek cancellation of the commercial licence; other breaches are punished by written warning, fines of B/.500 to B/.10,000 or cancellation of the authorisation.Ley 42 de 2001, arts. 21, 52, 2001-07-23 official text · verified 2026-10-29

6. Finance companies may not impose more onerous clauses, exclusions or restrictions on people who had cancer when five years have passed since the end of treatment without relapse.Ley 547 de 2026 art. 6, adding numeral 16 to art. 51 of Ley 42 de 2001, art. 51 numeral 16, 2026-09-08 official text · verified 2026-10-29 · changed: Added by Ley 547 of 8 September 2026 (Gaceta Oficial 30607-E).

7. Banks may freely set interest rates and the laws on maximum rates do not apply to them, but they must state the effective rate in statements, contracts and next to any nominal rate in advertising.Decreto Ejecutivo 52 de 2008 (texto único of Decreto Ley 9 de 1998 as amended by Decreto Ley 2 de 2008, the Ley Bancaria), arts. 79, 80, 2008-04-30 official text · verified 2026-10-29

8. Anyone operating a credit history bureau needs authorisation from the Ministerio de Comercio e Industrias, decided within 30 calendar days of a complete application; consumers have the right to know all information bureaus and lenders hold on them.Ley 24 de 22 de mayo de 2002, arts. 11, 17, 23, 2002-05-22 official text · verified 2026-10-29

9. Credit history data expires seven years after the last payment received on the obligation, or seven years after the first payment fell due if nothing was paid, and must then be removed.Ley 24 de 2002 art. 26 as worded by Ley 14 de 18 de mayo de 2006, art. 26, 2006-05-18 official text · verified 2026-10-29

10. With the consumer's express consent, utilities may report payment histories for telephone, electricity, water, sewerage and waste collection to credit bureaus, and the consumer may withdraw it in writing; the old ban on including utility data was repealed.Ley 135 de 31 de diciembre de 2013, adding numeral 12 to art. 28 and numeral 6 to art. 29 of Ley 24 de 2002 and repealing art. 30 numeral 1, arts. 28, 29, 30, 2013-12-31 official text · verified 2026-10-29

11. Local loans above B/.5,000 from banks and finance companies carry the 1 percent a year FECI surcharge; see the FX page on foreign loans and FECI.
Example: A B/.20,000 consumer loan carries B/.200 a year of FECI on top of interest. / US$20,000 loan, US$200 a year.Ley 4 de 1994 art. 2 as worded by Ley 98 de 2019, art. 2, 2019-10-09 official text · verified 2026-10-29

Worked example

A fintech wants to make US$5,000,000 (B/.5,000,000) of small business and consumer loans in Panama from its own balance sheet without taking deposits. It registers as an empresa financiera with MICI, paying B/.1,000, and capitalises it with at least B/.500,000.
Its contracts show the effective annual rate, use no interest capitalisation and add the 1 percent FECI on loans above B/.5,000. It reports payment data to an authorised credit bureau, which purges data seven years after the last payment.
Taking deposits or other funds from the public would instead need a banking licence.

Step by step

Confirm the model does not take deposits from the public (that needs a bank licence).
Apply to MICI's Dirección de Empresas Financieras through a lawyer, with B/.500,000 of paid capital.
Prepare contracts with the effective rate and no capitalised interest.
Sign up with an authorised credit bureau and collect consumer consents.
Calendar the B/.750 annual fee and FECI remittances.

Common traps

Finance companies, unlike banks, must follow the effective rate and anti capitalisation rules of Ley 42 and Ley 33 enforced by MICI.
The B/.500,000 capital figure is the enacted text of Ley 42 art. 28; confirm no later change with MICI before filing.
Funding a lending book with money from the public is deposit taking without a licence under the Ley Bancaria.

Sources

← Insurance in Panama: Superintendencia de Seguros licences, B/.5 million capital and the duty to insure local risks with local insurersBuying and owning property in Panama: equal rights for foreigners, public deed and registration, and who pays which closing cost →

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