Financiera Independencia, a microfinance institution (MFI) traded on the Mexican Stock Exchange, has signed a USD 41 million (MXP 530 million) agreement to acquire all of the outstanding shares of Finsol, a Mexican MFI. The agreement also includes the acquisition of three related entities: Financiera Popular Finsol, a savings and loan entity; Finsol Vida, an insurance broker; Finsol, a service company; and Instituto Finsol Brazil, an MFI in Brazil. To finance the deal, Financiera Independencia plans to issue 85 million shares, which will provide about USD 23.2 million (MXN 300 million) in capital. Mr. Noel Gonzalez, Chief Executive Officer of Financiera Independencia, said: “This is a significant milestone for Independencia. The acquisition of Finsol will allow us to increase our client base close to 1.4 million clients, operate a total of 356 branches in Mexico and expand our total outstanding loan portfolio to MXP 5,588 million (USD 432.7 million).”

By: Stefanie Rubin, Research Assistant

About Financiera Independencia:

Founded in 1993, Financiera Independencia is a Mexican microfinance institution traded on the Mexican Stock Exchange (BMV: FINDEP). As of September 2009, Financiera Independencia had a total outstanding loan balance of USD 371.2 million (MXP 4,793.1 million) and operated in 198 offices in 143 cities in 31 of Mexico’s 32 federal entities.

About Finsol:

Founded in 2003, Finsol operates 158 branches in 29 of 32 federal entities in Mexico. It has a total outstanding loan balance of USD 49 million (MXP 632.3 million) and 143,045 clients. Among its products are individual microcredit, group microcredit and life microinsurance (LMI).

About Instituto Finsol Brazil:

Founded in 2006, Instituto Finsol Brazil is a Brazilian microfinance institution (MFI) with an outstanding loan portfolio of USD 16.4 million (R 28.7 million). It operates 16 branches in five Brazilian states and has a total of 30,134 clients.

Additional Resources:

Source Article: PR Newswire: “Financiera Independencia to Acquire Financiera Finsol and to Expand Internationally to Brazil,” http://www.prnewswire.com/news-releases/financiera-independencia-to-acquire-financiera-finsol-and-to-expand-internationally-to-brazil-78128022.html

Dow Jones Newswires: “UPDATE: Mexico’s Independencia to Buy Microfinance Co Finsol,” http://online.wsj.com/article/BT-CO-20091130-708124.html

Financiera Independencia: http://www.independencia.com.mx/index.aspx

The MIX Market: Financiera Indpendencia: http://www.mixmarket.org/mfi/financiera-independencia

MICROCAPITAL.ORG STORY: Financiera Independencia (Independencia) Announced Increase in Line of Credit With Government-Backed Sociedad Hipotecaria Federal (SHF) From MXP 600 Million (USD 45.2 Million) to MXP 700 Million (USD 52.7 Million): http://www.microcapital.org/microcapitalorg-story-financiera-independencia-independencia-announced-increase-in-line-of-credit-with-government-backed-sociedad-hipotecaria-federal-shf-from-usd-452-million-to-usd-million-usd/

MICROCAPITAL STORY: Mexican Microfinance Institution, Financiera Independencia, Reports First Quarter Net Income of MXP 117.2m (USD 8.9m): http://www.microcapital.org/microcapital-story-mexican-microfinance-institution-financiera-independencia-reports-first-quarter-net-income-of-ps-1172m-usd-89m/

Finsol: http://www.finsol.com.mx/

The MIX Market: Instituto Finsol Brazil: http://www.mixmarket.org/mfi/instituto-finsol