Washington, D.C, September 20, 2006—The
International Finance Corporation, the private sector arm of the World
Bank Group, is providing a seven-year loan of $10 million equivalent in
local currency to Banco Compartamos, a leading microfinance bank focused
primarily on women in rural Mexico. This is the first commitment
of a $50 million financing package approved by IFC’s board to support
Compartamos’s growth over the next three years.
Compartamos’s core product is village banking, which entails lending to
groups of 15 to 50 women. About 99 percent of Compartamos’s clients
are women, with loans averaging $410.
Atul Mehta, IFC’s director for Latin America and Caribbean, said, “IFC
has a long-standing partnership with Compartamos, which continues to solidify
through this multi-product financing. As a niche bank, Compartamos
will be able to serve the needs of its current clients better and to reach
new clients not currently served by other banks.”
Compartamos, a role model for strong financial performance, has established
a highly successful lending methodology in microfinance. In May 2006,
Compartamos received a license to operate as a bank, from its previous
status as a SOFOL (a non–deposit-taking financial services company), and
it plans to reach 1 million clients by 2008 through careful and strategic
introduction of savings and new credit products.
Carlos Danel, Compartamos’s co-CEO, said, “Our transformation to a bank
permits us to move closer to our client base by providing a wider range
of lending and savings products. Continued support from financial
institutions such as IFC facilitates the long-term stability and growth
prospects of institutions like Compartamos, and helps to deepen the financial
sector and build a more inclusive financial sector in the country.”
The partnership between IFC and Compartamos began in 2001, when IFC provided
financing and equity to help it develop from a nongovernmental organization
to a commercially viable entity, facilitating access to market-based funding
and expanding services. In 2004 and 2005, IFC provided a 34 percent
partial credit guarantee to the two tranches of a local currency five-year
bond (rated locally as AA by Standard & Poor’s and Fitch), the first
ever for a microfinance institution in Mexico.
As the largest international provider of funding for microfinance, IFC
is deeply committed to helping successful companies like Compartamos achieve
their growth plans.
Jyrki Koskelo, IFC’s director for Global Financial Markets, noted, “We
are committed to supporting the growth of microfinance institutions, which
foster a strong developmental impact in its markets. We continue
to develop innovative structures to better meet their financing needs in
IFC in Mexico
Since 1956, IFC has invested $5.6 billion in Mexico, including $2.2 billion
in syndications, in sectors ranging from infrastructure and manufacturing
to agribusiness and the financial sector, making that country the third-largest
recipient of IFC financing, in dollar value, after Brazil and Argentina.
IFC committed $279.8 million in FY05 as new financing in Mexico, and it
held a total portfolio of $1.6 billion, including syndications, as of May
IFC’s strategy for Mexico focuses on strengthening
the international competitiveness of the country’s private sector, especially
by further deepening the financial sector, promoting investments where
the private sector can play a larger role, and supporting sustainable social
and environmental development and good corporate governance.
The International Finance Corporation, the private sector arm of the World
Bank Group, is the largest multilateral provider of financing for private
enterprise in developing countries. IFC finances private sector investments,
mobilizes capital in international financial markets, facilitates trade,
helps clients improve social and environmental sustainability, and provides
technical assistance and advice to businesses and governments. From its
founding in 1956 through FY06, IFC has committed more than $56 billion
of its own funds for private sector investments in the developing world
and mobilized an additional $25 billion in syndications for 3,531 companies
in 140 developing countries. With the support of funding from donors, it
has also provided more than $1 billion in technical assistance and advisory
services. For more information, visit www.ifc.org.
Banco Compartamos is a leading microfinance institution in Mexico. It has
a growing network of 145 branches in the country’s 31 states and more
than 450,000 borrowers, primarily in rural communities. At March 31, 2006,
Compartamos’s loan portfolio reached $186 million with reported arrears
over 30 days of 0.97 percent. Income generated during 1Q06 was $11.64 million
equivalent resulting in a ROAE of 58.6 percent and ROAA of 21.3 percent.