IIC Invests MX$15 Million to Establish one of Mexico’s First Niche Banks
Equity investment in Corporación Financiera de Occidente S.A. de C.V. SOFOL supports SMEs in the agribusiness and manufacturing sectors
Washington, D.C., September 11, 2012 — The Inter-American Investment Corporation (IIC) has approved the purchase of up to MX$15 million in preferred shares in Mexico’s Corporación Financiera de Occidente S.A. de C.V. SOFOL (Finox), a limited-scope financial institution.
Finox provides financial services to small and medium-sized enterprises (SMEs) of Mexico’s agribusiness and manufacturing sectors. The proceeds of the IIC investment will enable Finox to strengthen its capital position and help it begin the transition of converting from a nonbank financial institution to one of Mexico’s first niche banks. During Finox’s first five years of operation as a niche bank, it is expected to triple its staff and serve some 3,600 clients in 15 branch offices across Mexico.
According to Goldie Shturman, the IIC’s investment officer in charge of the operation “Through this equity investment, the IIC is promoting the development of Mexican SMEs and providing key support to Finox in its conversion to a niche bank. Once it obtains its banking license, we expect that Finox will expand its lending portfolio and secure access to new sources of financing, including deposits from the public.”
Finox was established in 2004 as a limited-scope financial institution or “SOFOL.” Mexican SOFOL institutions specialize in lending for specific activities and sectors, including agribusiness, microlending, and SMEs. According to Mexican legislation, the SOFOL vehicle will cease to exist as a form of legal entity as of 2013, and any such institutions that have not converted to banks by that time will become unregulated entities.
Located in Guadalajara, Jalisco, Finox is one of 20 SOFOL institutions and one of six that specifically cater to Mexico’s agribusiness sector. Finox has clients in ten Mexican states and a portfolio of some 300 corporate loans.
About the IIC
The IIC, a member of the Inter-American Development Bank (IDB) Group, promotes private-sector development in Latin America and the Caribbean with a focus on small and medium-sized enterprises (SMEs). We help companies streamline management processes and provide them with financing in the form of equity investments, loans, and guarantees. In 2011, the IIC reached the symbolic one-billion-dollar mark in disbursements of own and third-party funds. Throughout our history, we have benefited more than 1.6 million SMEs in Latin America and the Caribbean. For more information on the IIC’s activities, visit www.iic.org.
Contact: Goldie Shturman
Telephone: +1 (202) 623-1337