Mexico's Largest Social Bank Exits Remittance Market
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Mexico's Largest Social Bank Exits Remittance Market

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Sofía Hanna By Sofía Hanna | Journalist and Industry Analyst - Wed, 03/22/2023 - 16:03

The Banco del Bienestar (The Wellness Bank), created by the administration of President Andrés Manuel López Obrador, informed that as of Feb. 28, it formally stopped receiving remittances from any banking institution, remittance company or integrator. The service was officially left in charge of Financiera para el Bienestar (Financial for Wellness) to “improve and extend its services to a greater number of people.” 

Financiera para el Bienestar is “an institution with a network of 1,700 branches throughout Mexico and over 100 years of experience in assisting Mexicans who receive funds from their relatives abroad,” states Banco del Bienestar in the official press release. Banco del Bienestar is Mexico’s most extensive social bank. The institution says that this is not a sudden decision, as since last December, Banco del Bienestar contacted remittance companies to notify them of its exit from the remittance market so they could take precautions. The objective was to have a gradual and orderly withdrawal that would not affect remittance beneficiaries or clients.

The decision was ratified in the Official Journal of the Federation (DOF), which states “that in order to improve and extend its services to a greater number of people, mainly those living in communities excluded by traditional banking, it is natural to expand the offer with loans, promote savings and strengthen international remittances, so it is beneficial, technically and economically, to take advantage of the current infrastructure and coverage, to reach the target population.” 

The decision not to participate in the remittance market allows Banco del Bienestar to focus its efforts on the two main objectives set by the Mexican Government: the expansion plan to build the largest branch network in the country and to provide banking services to beneficiaries of social programs, as stated in the release. 

“What we are trying to do through Financiera del Bienestar is to reduce the cost of transferring remittances because there is a cost and the more we reduce it, the better it is for the beneficiaries,” said Gabriel Yorio, Deputy Minister of Finance, after his participation in the Financial Health Forum for Women. Yorio acknowledged that private banks receive 95% of the remittances, while the development banks, such as the Banco del Bienestar, receive much less. He added that alliances would be sought with intermediaries abroad to lower the costs of sending money to Mexico.

Photo by:   GOBMEX

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