A bill introduced in the Legislative Assembly proposes regulating cooperatives and credit associations whose savings range from $30 million to $92 million.
The bill, prepared by the Federation of Association of Savings and Credit Cooperatives of El Salvador (Fedecaces), proposes establishing a different regulation, more appropriate to the size and characteristics of these entities.
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EDITORIAL
In Costa Ricaastate run bankand anagricultural cooperativehave once again been rescued from insolvency and the mismanagement of their managers, using, as it would not have been possible any other way, money belonging to taxpayers.
Unions are opposed to the legal reform which aims to extend the scope of the supervision of the Superintendent of Financial System over savings and loans cooperatives.
In the view of Julio Cesar Portillo, secretary of the board of the National Commission for credit unions in El Salvador and CEO of Co-Andes de R.L. ,"...
The conversion to biofuel is feasible in agribusinesses who have their own waste production the raw material needed to generate it.
The return on investment calculation of $9 million in less than four years was a deciding factor in the Cooperativa Agroindustrial de Productores de Palma Aceitera (Coopeagropal) introducing a clean energy program.
"The biggest investment is the installation of a giant digester using German technology, in which the organic matter from the plant wastewater is processed."
Between 2006 and 2013 the number of agencies in the network of cooperatives in the country doubled.
Salvadoran Credit Unions have experienced a significant increase in the last year in order to expand financial services in most areas of the country.
The Federation of Savings and Credit Cooperatives of El Salvador (Fedecaces) announced that "growth is supported by an increase of over 20% in the portfolio of loans and deposits, after the close of 2013."
At the request of producer cooperatives Congress is considering eliminating the tax for the sector.
What has been suggested is reforming a decree which "designates a 1.5% retention of Income Tax (ISR by its initials in Spanish) on cooperatives for their agricultural activities, which according to these entities affects them, because they generate illiquidity and this prevents coffee farming being a sustainable activity," noted an article in Laprensagrafica.com.
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 Salvadoran government has exonerated 16 cooperatives in the country from paying rent and municipal taxes.
From a press release issued by the Ministry of Economy in El Salvador:
The Economy Minister Armando Flores delivered, on March 21, Executive Economic Agreements to 16 cooperatives, thereby giving them the benefit of income tax and municipal tax exemptions, as established under Article 72 of the General Law on Cooperative Associations.