The bank BAC San José de Costa Rica has issued $210 million at a 7-year term securitizing the flow of deposits received from abroad in corporate accounts in the form of remittances or payments for exports or imports.
Although the bank did not specify the interest rate for the issue, Gerardo Corrales, general manager of the company, told Elfinancierocr.com that "... it is a fixed return."
$4.5 billion a year comes from the U.S., generating a fierce battle between 22 banks and transfer companies that compete for the market.
The stiff competition for larger pieces of the cake that makes up remittances is leading banks and financial companies to sign alliances and join forces.
For example the company AirPak / Western Union this week signed an alliance with Banco de los Trabajadores (Bantrab) in order to increase their participation in the remittance business through the promotion "Remesa del Norte” (Remittance from the North). Customers participate in a draw for a car, motorcycles and appliances with each consignment.
Fedecrédito joins Wells Fargo in order to capture a greater market share of remittances between the U.S. and the Central American nation.
"We believe that our Salvadoran population living abroad, will appreciate having adequate access to services, enabling them to send money home quickly and safely, with a network of branches with a presence nationwide", said Macario Armando Rosales Rosa , president of Fedecrédito.
The banks have announced an agreement to provide a remittance service known as ExpressSend.
The new service will allow Guatemalans based in the U.S. to directly deposit money into savings accounts in Guatemala using any of the six thousand Wells Fargo service points.
"Wells Fargo is already operating remittance transactions with Banco Industrial (BI) and the Rural Development Bank (Banrural) in the country.