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.

Source: BNamericas (link opens in a new window)

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Base of the Pyramid, financial innovation, governance, microfinance