Mexico: Compartamos Likely To Look South For Expansion
Mexico City, Mexico, January, 24 2011 -
Mexican microfinance company Compartamos SAB will likely look south to Latin America as its seeks to expand operations abroad, a company official said Wednesday.
Carlos Danel, executive vice president of Compartamos, said at a press conference at the stock exchange that the company's medium and long-term plans include looking for partners or acquisitions in markets similar to that of Mexico, particularly other Latin American countries. The Central American market resembles certain southern states of Mexico, such as Chiapas, Oaxaca, and Veracruz, he said.
Banco Compartamos recently swapped its shares for shares in newly listed holding company Compartamos SAB with the aim of giving the company greater flexibility as it pursues expansion both in Mexico and abroad. The company is in the process of delisting the Banco Compartamos shares, which could take about three months.
Compartamos has nothing specific in the way of acquisitions or partnerships at present. "We're in the evaluation phase," Danel said. adding that financing for expansion could be via new capital, debt, or a combination.
Compartamos chairman Alvaro Rodriguez noted that the bank has a capitalization level above 40%. "With that capital structure, we have many [financing] options, " he said.
Compartamos is Mexico's largest microfinance bank. It had 1.75 million customers and a loan portfolio of 8.78 billion pesos ($728 million) at the end of September 2010. The bank specializes in small working-capital loans, averaging around MXN5,000, to people who have little or no access to traditional bank credit. It also grants home improvement loans, and offers life insurance policies.
Compartamos shares recently traded at MXN21.98, up 0.5% from the previous close but down 17% from their launch on Dec. 24.