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"Mexico lacks a proper clture concerning personal finance"
Gonzalo Palafox, Su Casita |
Hundreds of thousands of Mexicans are borrowing from a new kind of creditor, called a sofom, but experts are concerned that the unregulated lenders are charging extortionate rates of interest.
In July 2006, a change in the law enabled sociedades financieras de ojeto multiple (sofomes) – financial companies that provide all classes of credit, including mortgages, car loans, personal loans, bridging loans, department store loans, credit cards, commercial loans, leasing, and microcredit – to be created.
Last year, 383 sofomes were set up compared with only 43 during 2006, according to Asofom (the Mexican association of sofomes). This year, a further 250 are expected to be established. They are expected to have about 200,000 clients and to grant total credit of Ps3.5 billion ($340 million). Some of the lenders charge annualized interest rates of more than 60%, while Mexico’s benchmark...
