Corporación Financiera de Occidente S.A. de C.V. SOFOL (“Finox”)

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Project Number: 
ME3976A-01
Expected Consideration Date by the Board: 
09/04/2012
Date Posted: 
08/03/2012
Company: 
Corporación Financiera de Occidente S.A. de C.V. SOFOL (“Finox”)
Financing Requested: 
MX$15 million
Sector: 
Financial Services
Location: 
Guadalajara, Mexico
Country: 
Scope Objective: 

Finox was founded in 2004 as a limited-scope financial institution (known by the Spanish acronym SOFOL). Finox provides financial services to micro, small, and medium-sized enterprises, mainly in the agribusiness and manufacturing sectors. Its products include loans to finance production cycles, sales, imports, equipment procurement, and investment projects. Finox management has extensive experience and a long track record in Mexico’s financial sector and has demonstrated good corporate governance and strict adherence to corporate policies and procedures. Finox does business in ten of the country’s federal entities—chiefly Sonora, Jalisco, Michoacán, and Colima.

The company is currently seeking a license to operate as a niche bank or Level II Specialized Bank. Under Mexican law, the SOFOL will cease to exist as a category of legal entities in 2013.

Through an investment of MX$15 million (approximately US$1 million) in preferred stock, the IIC will be backing one of the first processes in the country in which a non-bank financial institution transitions to a niche bank. This transition will allow Finox to substantially grow its loan portfolio, increase its lines of credit with current funders, secure access to greater funding sources, and, in the medium term, attract significant resources from the public.

Environmental Review: 

This is a category III project according to the IIC’s environmental and labor review procedure because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. Finox will be required to comply with the IIC’s List of Excluded Activities. To enable it to better understand the IIC’s requirements, Finox will also be required to attend the IIC financial intermediary environmental training workshop.