Compartamos Set to Enter Guatemala, other Latin American Countries

Nov 2010
Mexico City, Mexico, November, 23 2010 - Mexican microfinance bank Compartamos is positioning itself to enter the Guatemalan market in 2011, even as it continues to look for acquisitions in Peru, Colombia and Brazil, Compartamos CFO Patricio Diez told BNamericas.

Diez said a recently announced restructuring plan that would shift the bank's ownership into a holding company was part of the plan to accelerate international expansion plans.

"With this new structure, we are clearly seeking more operational flexibility and are looking for these investment opportunities outside Mexico to come to fruition more rapidly," the executive said.

Guatemala will be the bank's first target for expansion. Compartamos plans to enter the market organically some time during the next 12 months, Diez said.

The CFO said Compartamos already has a strong presence in the southern Mexican state of Chiapas, neighboring Guatemala, meaning the company has a good understanding of the local culture. Also, an organic expansion into Guatemala can be carried out quicker than an acquisition.

Diez noted that at this point, Compartamos does not plan to seek a banking license in Guatemala and will enter the market through other means, but that it will continue to look for acquisitions in Colombia, Peru and Brazil.


All Compartamos' international expansion plans are contingent on the success of the switch to a holding company, a process Compartamos launched last week with an offer to shareholders of a four-to-one swap of shares in the new holding company for Compartamos Banco shares.

The offer needs 85% participation to take effect and 95% participation in order to delist Compartamos Banco and leave just the holding company on the exchange.

Diez said the deal is a "plain vanilla" corporate restructuring, as the same management will remain in place and Compartamos Banco will be the holding company's only asset. Should the company fail to get the 95% necessary to delist the bank, Diez said it will keep repeating the offer until it does.

The exchange offer expires on December 17, he said.

Compartamos is 31.8% owned by founding civil society association Promotora Social Mexico, while international microfinance group Accion Internacional holds slightly more than a 5% stake.

The remaining shares are free-floated on Mexican stock exchange BMV.


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