There are 40 commercial banks currently operating in Mexico, a high proportion of which are foreign-owned by global companies such as BBVA and Citigroup. The number of banks in the country, however, is just one sign of how the banking sector has been transformed since the Mexican financial crisis of 1995.

Perhaps what is most interesting, in a country where faith in the banking sector is still relatively weak, and where in 2000 only one in five Mexicans had a bank account, is the change that has taken place in the range of services now available to clients.

One of these, microfinance, has added a much needed new facet to an industry that seemed to be failing certain segments of society, those whose socio-economic circumstances had previously limited their access to credit. Today, more than 40 institutions and banks are specializing in microfinance and providing tailor-made products for low-income clients.

While most microfinance services in Mexico are relatively new, one bank has almost 17 years of experience in the field. Previously an NGO until its establishment as a financial institution in 2000, Compartamos today enjoys 5.8% of a potential market of 14.5 million people, and has over 250 branches throughout the country. Its number of clients rose by 36% in 2007 alone.

At Compartamos, however, according to co-Executive Director Carlos Danel, clients are far from being just numbers. “If you talk to staff and clients, they understand that we want to do something else than just provide money. We are providing opportunities for the growth of people, doing something for their households and for the country.”

The products and services that Compartamos offers low-income entrepreneurs are: Income Generators, which provide credit to groups of 12 or more women to set up businesses; Home Improvement, loans for women with an existing Income Generator Credit; Solidarity Group, loans for smaller, mixed groups; and Individual Credit and life insurance, which are available to all clients. Repayment is based on the microenterprise’s performance.

“Microfinance has proven that low-income clients can use working capital and grow themselves out of poverty,” says Danel.

Projects financed by Compartamos include the rural trade of food products, garments and handicrafts, farming and agriculture activities as well as other trade-related activities and services. Clients vary not only in terms of their business plans, but also in gender, background and geographical location.

In the future, Compartamos is looking to grow both vertically and horizontally. “The core of what we do for the next three to five years will be the same,” Danel comments. “But we also want to offer clients more products and services to serve their needs in other areas.”