Starting this year, Findeter issues bonds on the domestic market. The bonds are not guaranteed by the government, and must offer competitive yields. Findeter lends to commercial banks in pesos at a variable rate, pegged 2.5 percent above the market average rate for fixed-term deposits. It also charges a 1 percent up-front fee. Findeter's financial income has been enough to cover its cost of funds including exchange losses, administrative expenses, and positive real returns on its equity.
Sophisticated borrowers call for quotations from several banks and get spreads below the cap.
The resulting rates have floated in a range 10-12 percent above inflation, broadly consistent with market terms for fine corporate debt. Banks which participate in Findeter's program retain the full credit risk-Findeter refinances their loans but does not buy them. The main benefit of Findeter's involvement for the banks is to lengthen the terms they can offer without incurring a maturities mismatch. Several banks have approved small loans relying almost entirely on Findeter's appraisals-like bond investors in the US might rely on a credit rating. A stream of revenues can be escrowed at the creditor bank.