MasterCard Inc, a US-based payments and technology company, has established a new business model to reach small and medium-sized enterprises (SMEs) by enabling regulated microfinance institutions (MFIs) in Mexico to become card issuers. According to Jose Manuel Zacate, head of commercial products for Mexico and Central America, this model enables “microfinance institutions to offer better products and services which allow them to grow their market share in the financial system.” Te Creemos, a Mexican MFI, is the first in the country to implement this model.
The new payment system is meant to lower the costs borne by MFIs. Te Creemos CEO, Jorge Kleinberg, stated the following, “Customers making up the microfinance segment have traditionally carried out their transactions in cash, basically because they did not have access to other payment tools. This joint venture with MasterCard presents itself as a golden opportunity to modify this behavior, under affordable conditions.” Over the next three years Te Creemos aims to provide financial services to 250,000 new customers.
MasterCard serves consumers, governments, financial institutions, merchants and other businesses in approximately 210 countries and territories. As of June 2012, MasterCard reports total assets of USD 11.2 billion.
Te Creemos, which was founded in 2005, provides a range of financial services to the country’s low-income population. As of 2011, Te Creemos has a gross loan portfolio of USD 28.1 million, 70,593 active borrowers, USD 17.8 million in deposits, 21,899 total depositors and total assets of USD 44.9 million. In 2011 it reported a return on assets of 5.23 percent and a return on equity of 46.23 percent.
By Lena Phillips, Research Associate
About Te Creemos
Te Creemos, founded in 2005, is a Mexican financial institution that provides a range of financial services to the country’s low-income population including loans, savings and insurance. According to the US-based nonprofit Microfinance Information Exchange, Te Creemos has a gross loan portfolio of USD 28.1 million, 70,593 active borrowers, USD 17.8 million in deposits, 21,899 total depositors and total assets of USD 44.9 million as of 2011. In 2011 it reported a return on assets of 5.23 percent and a return on equity of 46.23 percent.
MasterCard is a global payments and technology company that is headquartered in New York, USA. It connects consumers, financial institutions, merchants, governments and businesses in approximately 210 countries and territories. As of June 2012, MasterCard reports total assets of USD 11.2 billion.
Sources and Additional Resources:
4-traders.com: “MasterCard Introduces a New Business Model for Microfinance Institutions in Mexico”, 3 December 2012, http://www.4-traders.com/MASTERCARD-INC-17163/news/Mastercard-Inc-MasterCard-Introduces-a-New-Business-Model-for-Microfinance-Institutions-in-Mexico-15572119/
MicroCapital.org article, 2 July 2010: “MICROCAPITAL BRIEF: responsAbility Global Microfinance Fund and responsAbility Mikrofinanz-Fonds Disburse $72,000 to KapitalMujer and Te Creemos of Mexico”, http://www.microcapital.org/microcapital-brief-responsability-global-microfinance-fund-and-responsability-mikrofinanz-fonds-disburse-72000-to-kapitalmujer-and-te-creemos-of-mexico/#more-5588
MicroCapital.org article, 30 October 2012, “MICROCAPITAL BRIEF: Western Union, ICICI Bank, MasterCard Unveil Prepaid Card in India”, http://www.microcapital.org/microcapital-brief-western-union-icici-bank-mastercard-unveil-prepaid-card-in-india/#more-20788
MicroCapital Universe Profile: MasterCard, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MasterCard
MicroCapital Universe Profile: Te Creemos, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Te+Creemos
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