Microfinance Focus July 28, 2011: Financiera Independencia, a Mexican microfinance lender of personal loans to lower income segment individuals and working capital loans through group lending microfinance, on Wednesday announced results for the three and six month periods ended June 30, 2011.

Independencia’s net income for the second quarter of year 2011 declined 60.3% year over year to Ps.57.0 million.

Highlights of 2Q11 are as follows:

·         Total loan portfolio of Ps.6, 742.9 million, a 25.2% year-over-year increase, driven by AEF and AFI acquisitions and significant growth at Finsol.

·         Independencia’s individual new loan origination increased to Ps.996.1 million, up 4.0% year-over-year and 14.8% quarter-over-quarter.

·         Non-performing loans to total loans ratio down to 9.8% in 2Q11 from 11.2% in 2Q10 and up from 8.2% in 1Q11.

·         NIM after provisions including fees improved to 44.6% in 2Q11 compared to 42.6% in 2Q10.

·         Provisions for loan losses increased to 34.0% of financial margin in 2Q11, compared with 32.5% in 2Q10, and 29.6% in 1Q11.

·         Funding cost decreased to 10.82% in 2Q11, from 11.63% in 1Q11.

·         Net income down 60.3% YoY, and 36.7% on a sequential basis.

·         Equity to total assets of 28.4% compared to 34.1% in 2Q10, and 30.0% in 1Q11.

·         ROE in 2Q11 decreased to 7.6% compared to 12.1% in 1Q11, and to 19.8% in 2Q10.

Commenting on the results, Noel Gonzalez, Chief Executive Officer, said, “Our total loan portfolio rose by 25.2% year-on-year this quarter to Ps.6, 742.9 million, particularly reflecting significant growth at Finsol since its acquisition as well as the acquisition of AEF and AFI earlier this year. We have also begun to see an early recovery in Independencia’s individual loan portfolio this quarter, with loan origination up 14.8% quarter-on quarter and 4.0% year-on-year. This is the first quarter since we tightened our credit scoring model at the end of 2009 that we see growth in this loan segment.”