Until a year ago, microfinance and low-income banking in Mexico were a joint success story, growing at rates that made the rest of the country’s banking sector look sluggish.
But since the beginning of last year, as credit began to dry up on fears of global recession, the fortunes of the two sectors have diverged markedly.
Hardest hit has been low-income banking, where past-due loans have risen alarmingly. In the case of Bancoppel, for example, a bank built up around a well-established Mexican retail chain, past-due loans rose from 4.39 per cent of total loans in December 2007 to 20.12 per cent in December last year.
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