Could reforms unlock Mexico’s “huge” microfinance potential?
Tuesday, October 28, 2014
Mexico’s financial reforms could help the country’s microfinance industry fulfill its “huge potential” for growth, rating agency S&P said in a report.
Mexico is an ideal place for microfinance to thrive as traditional lenders are reluctant to provide credit to low-income segments of the population.
The country has one of the lowest microfinance penetration rates in the region, at 0.5% of GDP.
But despite the low penetration rate, the segment is highly competitive, as new players tend to target the same, highly indebted client-pool because of difficulties accessing new customers in remote areas.