In El Salvador, any business or individual can act as a financial intermediary with the support of a financial institution.
The regulation, which will take effect on August 1, enables banks to make agreements with third parties who can receive deposits from the public or lend money, up to certain limits, backed by a financial institution.
The model, which is already operating in countries like Colombia, seeks to expand the scope of financial services beyond bank branches.
The financial institution, with a portfolio of consumer loans of $869 million, is the market leader in El Salvador.
As of June 2012, with a portfolio of more than $2.523 million, the balance of consumer banking was $869 million, commercial loans $1,112.7 million, housing $415.9 million and credit cards $108 million, said Juan Carlos Angulo, product manager at the bank.
Banco Agrícola intends to open 200 small business correspondents, once the bill under study in the Legislature is approved.
The major attraction of this system, which already operates successfully in countries like Colombia, Brazil and Guatemala among others, is that it allows users access services provided by a bank without having to physically go to a branch or ATM . It also fosters growth in the small businesses that adopt the scheme.
Representatives from the electricity industry are arguing that investments of $1,000 million are needed for the tender to generate 350MW.
The international public tender launched in April for the provision of 350MW from July 2015 excludes the use of plants currently in operation, or to be operational by January 2012. The only offers that will be accepted are those from new plants whose operation is based on renewable energy sources, natural gas or coal.
Banco Agrícola will pay out remittances sent through Arias, MFIC's money transfer solution, that are originated by US institutions and through Alante Financial, MFIC's wholly-owned retail financial service centers targeted at immigrants.
With a credit from the BID, Banco Agricola will expand its loan program for micro, small, and medium sized businesses (MiPyMEs acronym in Spanish).
“The approval of the loan from the Inter-American Development Bank (BID acronym in Spanish) to Banco Agricola allows us to offer resources that are currently available to meet the needs of the credit market in El Salvador. And to continue supporting, especially, micro, small, and medium sized businesses, exactly as we have been doing in recent years,” said Juan Gonzalo Sierra, Financial Manager of Banco Agrícola.
Fitch changed its long term perspective rating from "stable" to "negative" for the banks Agricola, HSBC, and Scotiabank in El Salvador
The reason for this change is the current "negative" perspective for the sovereign rating for the Republic of El Salvador, which could affect the Issuer Default Rating for the long term for the three main banks in El Salvador in the case that the rating is reduced again in the country.
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