The Peruvian financial system

1. CONCEPT

The financial system is made up of the set of banking and financial institutions and other companies and institutions of public or private law, duly authorized by the Superintendency of Banking and Insurance, which operate in financial intermediation (regular activity carried out by companies and institutions authorized to attract funds from the public and place them in the form of credits and investments.

It is the set of institutions in charge of the circulation of the monetary flow and whose main task is to channel the money of the savers towards those who wish to make productive investments. The institutions that fulfill this role are called "Financial Intermediaries" or "Financial Markets".

2. INSTITUTIONS THAT MAKE UP THE FINANCIAL SYSTEM

Banks, Financial Companies, Insurance Company, AFP, National Bank, COFIDE, Stock Exchange, Investment Banks, National Society of Stockbrokers

3. REGULATORY AND CONTROL ENTITIES OF THE FINANCIAL SYSTEM

3.1. Central Reserve Bank of Peru

In charge of regulating the currency and credit of the financial system. Its main functions are:

To promote that the interest rates of the financial system operations are determined by free competition, regulating the market.The regulation of the money supply The administration of international reserves (RIN) The issuance of banknotes and coins.

3.2 Superintendency of Banking and Insurance (SBS).

- Control body of the national financial system, controls on behalf of the state the banking, financial, insurance companies and other natural and legal persons that operate with public funds.

The Superintendency of Banking and Insurance is an autonomous body whose objective is to oversee the Central Reserve Bank of Peru, Banco de la Nación and financial institutions of any nature. The supervisory function of the superintendency can be exercised broadly over any operation or business.

3.3 National Supervisory Commission for Companies and Securities (CONASEV).

Public Institution of the Economy and Finance sector, whose purpose is to promote the stock market, ensure the proper management of companies and regulate their accounting. It has legal status under public law and enjoys functional administrative and economic autonomy.

3.4 Superintendency of Administration of Pension Funds (SAFP).

Like the SBS, it is the control body of the National AFP System.

PERUVIAN FINANCIAL SYSTEM

4. CLASSES

4.1. BANKING FINANCIAL SYSTEM

This system is made up of all the country's banking institutions. Currently, the Banking financial system is made up of the Central Reserve Bank, the National Bank and the Commercial and Savings Bank. We will examine each of these institutions below.

4.1.1 CENTRAL RESERVE BANK OF PERU (BCRP)

Monetary authority in charge of issuing the national currency, administering the country's international reserves and regulating the operations of the national financial system.

4.1.2. NATIONAL BANK

It is the financial agent of the state, in charge of banking operations in the public sector.

4.1.3. COMMERCIAL BANK

Financial institutions whose main business consists of receiving money from the public in deposit or under any other contractual modality, and in using that money, their own capital and that obtained from other financing accounts to grant credits in the various modalities, or to apply them to operations subject to market risks.

Among these banks we have:

Banco de CreditoBanco Internacional del Perú - INTERBANKBanco ContinentalBanco Financiero del PerúBanco WiesseBanco SudamericanoBanco de Trabajo

4.1.4. THE BRANCHES OF FOREIGN BANKS

They are entities that enjoy the same rights and are subject to the same obligations as national companies of the same nature.

4.2. NON-BANKING FINANCIAL SYSTEM

4.2.1. FINANCIAL

It is made up of the institutions that attract resources from the public and whose specialty is to facilitate the placements of first issues of securities, operate with transferable securities and provide financial advice.

Among these we have:

Financial Solution for Credit of PéruFinanciera Daewo SAFinanciera CMR

4.2.2. MUNICIPAL SAVINGS AND CREDIT BANKS

Financial entities that attract resources from the public and whose specialty is to carry out financing operations, preferably to small and micro-enterprises.

Among these we have:

Municipal Savings and Loans Fund of Sullana Municipal Savings and Loans Office of Piura Municipal Savings and Loans of Maynas Municipal Savings and Loans of Cusco Municipal Savings and Loans of Trujillo

4.2.3. SMALL AND MICRO-ENTERPRISE DEVELOPMENT ENTITY - EDPYME

Institutions whose specialty is to grant financing preferably to small and micro-business entrepreneurs.

New Vision SAConfianza S.AEdyficar S.ACredinpet

4.2.4. MUNICIPAL CAJA DE CRÉDITO POPULAR

Financial entity specialized in granting pledge credits to the general public, meeting to carry out operations and liabilities with the respective Provincial and District Councils and with the municipal companies dependent on the former, as well as to provide banking services to said councils and companies.

4.2.5. RURAL BOXES

They are the entities that attract resources from the public and whose specialty consists of granting financing preferably to small and micro-enterprise entrepreneurs.

Rural Savings and Credit Bank of the San Martín Region Rural Savings and Credit Bank of the South Cajamarca Rural Savings and Credit Bank Cañete Rural Savings and Credit Bank

4.2.6. SPECIALIZED COMPANIES

Financial institutions, which operate as transfer agent and records of operations or transactions in the commercial and financial sphere.

to. FINANCIAL LEASING COMPANY

Organization whose specialty consists in the acquisition of movable and immovable property, which will be transferred in use to a natural or legal person, in exchange for payment of a periodic income and with the option to buy said property for a predetermined value.

Wiese Leasing SALeasing Total SA America Leasing SA

b. FACTORING COMPANIES

Entities whose specialty is the acquisition of invoices, securities and, in general, any transferable securities representing debt.

c. SECURITY AND GUARANTEE COMPANIES

Companies whose specialty consists in granting a bond to guarantee natural or legal persons before other companies in the financial system or before foreign companies, in operations related to foreign trade.

d. FIDUCIARY SERVICES COMPANY

Institutions whose specialty consists in acting as trustee in the administration of autonomous trust assets, or in the fulfillment of fiduciary assignments of any nature.

5. SERVICES PROVIDED BY THE FINANCIAL INSTITUTIONS

5.1 OPERATIONS

Financial entities have three generic types of asset operations:

Loan operations Credit operations Intermediation operations

The basic difference is that while loan operations are linked to an investment operation, whether in consumer, productive or service goods, they are granted to carry out something specific; the credit ones are not linked to any specific purpose, but generic. We can, therefore, say that in a loan the price of something is financed, while in a credit an amount of money is made available to us over a period of time.

Thus, we will have that the Loan Operations will be of various types depending on the guarantees and the purpose, being divided mainly into:

Real Guarantee Loans Personal Guarantee Loans

Regarding Credits, the most common operations are:

Credit accountsCredit cards

Intermediation Operations are those that are neither loans nor credits; the financial operation is accompanied by the provision of a series of services that are not strictly financial. Within this block we find the following operations: