The Business Year

Lorenzo Barrera Segovia

General Director, Banco Base

Fernando Álvarez Toca

General Director, Compartamos Banco

What demand have you seen from corporate clients, and what does that indicate about the investment patterns those clients are making at the moment in Mexico? LORENZO BARRERA SEGOVIA Over […]

What demand have you seen from corporate clients, and what does that indicate about the investment patterns those clients are making at the moment in Mexico?

LORENZO BARRERA SEGOVIA Over the past year and a half, we have seen many companies expanding their operations, plans, and products. They need lines of credit, loans to import machinery, and new equipment. Many of the companies that are established here in Mexico are international companies. They have offices throughout the world, and they have been given the green light to keep on growing their operations in Mexico. I think that is a good signal for our country. The current challenge for Mexico is to become the new Brazil. I think we need to take advantage of what Mexico can do in the next six years. I feel that with the new President, we definitely have the opportunity to have a new record amount of investments, where many of the companies grow at a faster rate.

What is your customer service philosophy?

FERNANDO ÁLVAREZ TOCA We are very focused on our clients and on trying to give them the terms that they require and the level of contact with a bank that they need. We are not a bank with branches; we have a force of 10,000 loan officers whose job is to go visit our 2.5 million clients in their houses every week. This close relationship helps the clients manage their loans correctly and helps us to be on the priorities of payments for our clients. We are not profitable because we charge more than our competitors, but because we are very efficient and we have a very low cost per client. Our return on equity (ROE) is around 30%, which is the highest in all the banks in Mexico.

What practices do you have in place to protect yourself and mitigate loss?

LBS We have to make sure that the stockholders of the companies that we serve are people that have credible records. In the banking bureau, we review how that company is paying its creditors. At the end of the day, we review if there is a risk in a certain company. If there is a risk we will take property as collateral for the credit. That is the way we secure ourselves. We need to make sure that the reforms are performed. Even though we have the collateral and time on our side, sometimes it is hard to recover that collateral. It takes years, creating a challenge for us. The main thing that we look for is the people that we are lending to. We know the stockholders, we know of their good reputation, and that they have a good history of servicing their credits.

How important is diversification for you looking ahead?

FT It is one of our top priorities. We are trying to diversify the business of Compartamos from being a mono-product company of group lending in Mexico. We want to be diversified not only in terms of products, but in countries as well. We have been very good at serving small entrepreneurs with the group lending methodology. The success we have enjoyed has been very visible for the business community, so all of the competition is coming there. Our clients are now more demanding, which is good, but also now they have more options. The group-lending segment has the opportunity to grow, but we used to grow 30% in that segment every year. However, that growth is no longer there because we have competition and the market is already well served. That is why we want to diversify.

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