After long dominating Mexican microfinance, Compartamos Banco faces the emergence of fintech, just as for the first time its loan portfolio and clients have declined. Enrique Majós, CEO of GENTERA, the bank´s parent company, is keenly aware of the profound changes since the Compartamos IPO in April 2007, when it was valued at $1.5 billion and became the first bank wholly dedicated to microfinance to be quoted in a major stock exchange. Since then, the market has become intensely competitive, with both large established institutions and new entrants vying for the same customers. Simultaneously, the digital era has spawned fintech, threatening to disrupt Compartamos’ highly successful model but also providing opportunities for the bank to reshape it. While challenged to manage key innovation within a leading incumbent, Majós must consider whether to commit his team to a major cost reduction in the next few years to his board of directors at their next meeting at the end of the month.
Andres Manuel Lopez Obrador became president of Mexico on December 1, 2018. His election, and the victory of his new Party, MORENA, represent a sharp shift to the left by Mexico’s political system. Previously, President Pena Nieto and his party, the PRI, had initiated and implemented the Pacto – a long overdue series of institutional and structural reforms. Yet even after several years, Mexico had not shown significant improvements in productivity, or growth. With U.S. relations at a low point, thanks to President Trump’s neo-isolationism, Mexico elected Obrador as a nationalistic response. It remained to be seen how his new policies would affect Mexico’s growth.
As a result of Mexico´s pension industry deregulation, pension funds were able to invest in energy and infrastructure projects through a variety of financial instruments, particularly through Capital Development Certificates (CKDs), an asset class that served as a vehicle for investing in unlisted companies. By the end of 2017, pension funds had invested more than $16 billion in infrastructure, with CKDs as the primary investment vehicle for this sector. Motivated by increased domestic liquidity and opportunities for investment, Rodrigo Jair launched Jair Infrastructure Investments, a specialized fund with the majority of its capital raised from pension funds. Jair was approached by Felipe Duarte, head of Banorte´s Infrastructure and Energy Group, who offered him a short-term credit line to increase the fund´s liquidity during its investment phase. Jair had to decide whether he should deploy this line or rely exclusively on capital calls from his investors to fund his pipeline. Was it worth paying the commitment fees to achieve increased liquidity? What risks should he consider when making this decision? What are the upsides and downsides of relying on equity or debt for a fund like Jair Infrastructure Investments? Will techniques like this bring significantly more capital into infrastructure investing?
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Maria Fernanda Miguel joined Harvard Business School in 2013 as Director for the Latin America Research Center (LARC). Her responsibilities include leading research activities for Spanish speaking countries in LATAM, and providing programmatic support to different areas of HBS including admissions, executive education, and immersion programs. Fernanda is based in Buenos Aires, Argentina.
Prior to join Harvard Business School, Fernanda was a Senior Director and Leader for LATAM Business Development at Merck and senior consultant at McKinsey & Co., serving as global Practice Manager for the Business Technology Office Health Care Practice.
Fernanda holds a degree in economics from the Argentine Catholic University, an MBA from Harvard Business School, and a Master of Research from University of Bath.
Fernanda has been very active in non-profit activities, including fund rising at the Fundación Acción Hemato-oncologica – Argentine National Academy of Medicine, and acting as advisor to the Board of Directors of the Hospital Garrahan.
Priscilla Zogbi is the Director of the Latin American Research Center in São Paulo. Priscilla focuses on the School’s work in Brazil, developing research opportunities for faculty and relationships for other educational efforts such as the MBA curricular innovation and immersion programs.
Priscilla has over 17 years’ experience in marketing and product development. Before joining HBS she was a consultant to private equity and venture capital firms interested in the region. Prior to that she was a Global and a Regional Marketing Director at Avon Products, and has held managerial positions in the US and Brazil with Bath & Body Works, General Mills, Johnson & Johnson and Reckitt Benckiser.