MICROCAPITAL.ORG STORY: Financiera Independencia (Independencia) Announced Increase in Line of Credit With Government-Backed Sociedad Hipotecaria Federal (SHF) From Ps. 600 Million (USD 45.2 Million) to Ps. 700 Million (USD 52.7 Million)

Financiera Independencia (Independencia), a microfinance bank based in Mexico City, has received an increased credit line from Sociedad Hipotecaria Federal (SHF), a government-backed bank that provides funding and guarantees for financial institutions [1,2,3]. The line of credit has now reached 700 million pesos (USD 52.7 million) from the previous amount of 600 million pesos (USD 45.2 million) [3]. The fund will mature in March 2011, which makes it the earliest maturity of all of Independencia’s funds [3]. Independencia’s Chief Executive Officer Noel Gonzalez has commented that the funding “[has brought the bank] one step closer in achieving [its] goal of diversifying funding sources in the medium term so that no single source represents more than 25% of the company’s debt” [3].

With this increase, Independencia now has over USD 316.5 million in available credit [3]. Besides the line of credit from SHF, Independencia has USD 188.4 million due in September of 2011 from HSBC Mexico (reported on Microcapital) and USD 75.3 million from Nacional Financiera, a Mexican development bank that “[acts] as financial agent of the Federal Government” [3,4,5,6]. The funding from Nacional Financiera has an “evergreen feature” which allows Independencia to renew its debt and push back the date of maturity.

As was reported on Microcapital, Financiera Independencia was founded in 1993 and has been listed on the Mexican Stock Exchange since 2007 [7]. According to the MIX Market, the microfinance information clearinghouse, Financiera Independencia has a gross loan portfolio of over USD 323.4 million and 1,085,963 active borrowers [8]. As of Decemeber 31, 2008, it had a return on assets of 14.7 percent, a return on equity of 62.18 percent, and a debt to equity ratio of 2.84 [8].

SHF was founded in 2002 by the Mexican Federal Government with the intention of “[attending to] the low and medium income sector of the population through the offer of mortgage credits and guarantees” [2]. According to the MIX Market, SHF funds a special line of credit for Financiera Independencia to use for CrediConstruye, a program which provides loans to “finance home improvements [for] individuals earning at least the Mexico City minimum monthly wage” [9]. SHF itself, however, does not report to the MIX Market. Its performance statistics are available, in Spanish only, on its website [2].

Nacional Financiera aims to “promote the overall development and modernization of the industrial sector with a regional approach [and] stimulate the development of financial markets” [6]. It is funded by “international development institutions such as the International Bank for Reconstruction and Development (IBRD) and the Inter-American Development Bank (IDB)” [6,10,11]. It does not report to the MIX Market, but further information on the bank is available, in Spanish, on its website [6].

By Christopher Maggio, Research Assistant

Bibliography

[1] Financiera Independencia (in Spanish): http://www.independencia.com.mx/index.aspx

[2] Sociedad Hipotecaria: http://nuevoportal.shf.gob.mx/English/AboutSHF/Paginas/default.aspx

[3] PRNewsWire article entitled ‘Financiera Independencia Announced Increase in Line of Credit With Sociedad Hipotecaria Federal From Ps.600 Million to Ps.700 Million’: http://nuevoportal.shf.gob.mx/English/AboutSHF/Paginas/default.aspx

[4] MICROCAPITAL.ORG NEWSWIRE entitled “HSBC to Divest its Stake in Financiera Independencia”:https://www.microcapital.org/news-wire-mexico-hsbc-to-divest-its-stake-in-financiera-independencia/

[5] HSBC Mexico: http://www.hsbc.com.mx/1/2/en/home

[6] Nacional Financiera: http://www.nafin.com/portalnf/content/home/home.html

[7] MICROCAPITAL.ORG STORY entitled ‘MICROCAPITAL STORY: Mexican Microfinance Institution, Financiera Independencia, Reports First Quarter Net Income of Ps. 117.2m (USD 8.9m)’: https://www.microcapital.org/microcapital-story-mexican-microfinance-institution-financiera-independencia-reports-first-quarter-net-income-of-ps-1172m-usd-89m/

[8] Financiera Independencia on the MIX Market: http://www.mixmarket.org/mfi/financiera-independencia/data

[9] SHF on the MIX Market: http://www.mixmarket.org/mfi/financiera-independencia

[10] International Bank for Reconstruction and Development: ‘http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/EXTIBRD/0,,menuPK:3046081~pagePK:64168427~piPK:64168435~theSitePK:3046012,00.html‘

[11] Inter-American Development Bank: http://www.iadb.org/