MICROCAPITAL BRIEF: Citi, DFC Announce $15m Local-currency Loan to CAME of Mexico to Boost Financial Inclusion of 40,000 SMEs

Consejo de Asistencia al Microemprendedor (CAME), a Mexican microfinance institution, recently agreed to borrow MXN 300 million (USD 15 million) through a partnership between US-based bank Citi and the government-backed US International Development Finance Corporation (DFC). The proceeds of the term loan are to be deployed to small and medium-sized enterprises (SMEs) in nine states in Mexico deemed more vulnerable to financial shocks – Guerrero, Hidalgo, Michoacán, Morelos, Nayarit, Oaxaca, Puebla, Tlaxcala and Veracruz. While the arrangement between Citi and DFC remains confidential, DFC sometimes guarantees investments funded by private firms such as Citi.

CAME’s loan products include group and individual loans ranging from MXN 3,000 (USD 150) to MXN 1 million (USD 50,000), with terms of 24 weeks to three years. Founded in 1993, the microfinance institution (MFI) has served approximately 387,000 customers while expanding to operate 239 branches in 31 states as of 2021. Approximately 65 percent of CAME’s borrowers are women. As of 2020, the MFI reports assets of MXN 3.4 billion (USD 170 million), a gross loan portfolio of MXN 2.4 billion (USD 120 million) and MXN 1.1 billion (USD 58 million) in client deposits.

Headquartered in the city of New York, Citi offers consumer and commercial banking, brokerage, asset management, and institutional securities and transactions services. It carries out its philanthropic activities, including a financial inclusion initiative, through the Citi Foundation. Citi serves approximately 200 million customers in 160 countries as of 2021. As of July 2021, it reports total assets of USD 2.33 trillion as well as quarterly return on assets of 1.68 percent and return on equity of 13.0 percent.

DFC was launched in 2020 to “help businesses expand into emerging markets, foster growth and improve lives in the developing world while reinforcing US foreign policy and national security interests.” The organization has an investment cap of USD 60 billion to deploy in forms such as equity placements, insurance, technical assistance and research. DFC focuses its efforts on low-income and lower-middle-income countries in areas such as “energy, healthcare, critical infrastructure and technology.” Upon its founding, DFC took over the work of the Overseas Private Investment Corporation and the Development Credit Authority of the US Agency for International Development.

By Arin Atluri, Research Associate

Sources and Additional Resources

Citi press release
https://www.citigroup.com/citi/news/2021/210817a.htm

CAME homepage
https://www.came.org.mx/

CAME 2020 financials
https://www.came.org.mx/libs/inher/pdf/inversionistas/informacion-financiera/2020/Estados-Financieros-4T.pdf

Previous MicroCapital article on CAME
https://www.microcapital.org/microcapital-brief-idb-invest-lends-15m-in-local-currency-to-came-of-mexico-to-promote-financial-inclusion-of-smes-companies-led-by-women/

DFC homepage
https://www.dfc.gov/

Citi homepage
https://www.citigroup.com/

Citi 2021 financials
https://www.citigroup.com/citi/investor/data/qer221s.pdf?ieNocache=912

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