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While banking penetration is very low—about 40 percent—telecom infrastructure is very well developed, and nearly everyone has access to a mobile phone, making mobile money an easy-to-implement solution.
updates and minor changes to the 2002 reforms. While the new banking laws are considered to be consistent with best practices according to international standards, the securities and commodities laws still do not measure up to the level of sophistication found elsewhere, a reflection of the Guatema- lan capital markets’ relative shallowness.
Although there’s no formal market division, business
loans are handled predominantly by Banco Industrial, SA (known locally as BI), Banco G&T Continental SA, (G&TC) and Banco Agromercantil de Guatemala, SA (BAM), while Banco de Desarrollo Rural, SA (Banrural) and Banco de los Trabajadores (Bantrab) concentrate on retail banking. These five banks control nearly all of Guatemala’s banking, and of them, BI and Banrural dominate.
THE REST OF THE SECTOR
There are several different types of businesses that qualify as financial institutions under the new Guatemalan laws. They include local banks and branches of foreign banks that have been authorized to do business in Guatemala, private
finance companies, local insurance companies and branches of foreign insurance companies authorized to do business, bonded warehouses, foreign exchange dealers, credit card issuers, and firms that participate in the securities and com- modities markets.
Two other types of financial institutions are offshore banking institutions, whose regulatory treatment is different from local branches of foreign banks, and financial groups, conglomerates of companies related to a single bank, for which the bank bears ultimate financial responsibility. It is the existence of these groups that has been responsible for the relative stability of Guatemala’s banking system and economy even during the worldwide recessions of 2008 and 2011, because of the significant reserves required of the banks. The banks’ main exposure is their accumulation of sovereign debt, the acquisition of which is necessitated by liquidity requirements.
Guatemala’s stock exchange, the Bolsa de Valores Nacio- nal, was established in 1987 and recorded its first trade in 1989. Now in its third decade, it has grown rapidly, which
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