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Mexico’s Financiera Independencia Closes MXN530M Finsol Deal

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Interesting M&A developments in Mexican Microfinance Institutions… great to see larger firms realizing the value of smaller MFIs, and recognizing that value in 8.6x Net Book Value premiums.

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MEXICO CITY (Dow Jones)–Mexican consumer finance company Financiera Independencia SAB (FINDEP.MX) said Friday that it has closed the acquisition of lender Financiera Finsol for 530 million pesos ($41.4 million).

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The deal included MXN794.6 million in loans and 173,179 clients, Financiera Independencia said in a filing with the Mexican Stock Exchange.

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Finsol’s operations include savings-and-loan firm Financiera Popular Finsol SA, insurance broker Finsol Vida SA, and Brazilian microfinance lender Instituto Finsol Brazil.

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Financiera Independencia said the acquisition of Financiera Popular Finsol is still subject to the approval of the National Banking and Securities Commission, which it expects to obtain during the second quarter.

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The deal expands Independencia’s microfinance business, which still represents a small portion of its largely consumer-oriented loan portfolio. Finsol specializes in making small loans to groups of individuals.

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Microfinance, or the provision of small-scale financial services such as small working-capital loans, savings accounts, and insurance policies, has gained popularity worldwide in recent years as a way to combat poverty.

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Financiera Independencia, which operates as a nonbank finance company, had 198 offices and MXN4.79 billion in loans at the end of September.

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The company’s shares closed 1.1% higher at MXN11.48 on Friday.

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