Mexico’s Compartamos Seeks to Buy Micro-Finance Lender Abroad

Apr 2010
Monterrey, Mexico, April, 15 2010 - Banco Compartamos SA, the Mexican bank that lends to the working poor, is seeking to purchase a micro-finance bank outside of Mexico to expand abroad, Chief Executive Officer Fernando Alvarez Toca said.

The bank, whose clients include half of the 3 million people with micro-finance loans in Mexico, is looking mostly in Colombia, Peru, Brazil and Central America, Alvarez Toca said in a telephone interview.

“We’re actively looking at possibilities to acquire some institution that allows us to expand rapidly to another country and take our strategy to another country,” he said.

Compartamos, based in Mexico City, posted loan growth of more than 33 percent in each of the last four years by offering loans that averaged 5,086 pesos ($417) last year to individuals who sell tacos, sew garments or sell door-to-door from catalogues for a living. The bank estimates that the micro- finance market may grow to 12 million customers.

The bank could finance a purchase with debt or by raising capital and may look for more international opportunities, Alvarez Toca said.

“A lot of it will depend on the success or difficulties that we encounter,” he said.

The bank doesn’t plan to acquire any competitors in Mexico, he said. Mexico’s large banks haven’t entered the micro-finance market, where interest rates are often higher than 60 percent to make up for the costs of issuing and maintaining small loans.

Compartamos plans this year to begin offering savings accounts with debit cards to pay loans to customers, Alvarez Toca said. The bank also plans to offer savings accounts to those who aren’t loan customers, he said.

Source : Bloomberg

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