CAPEM is a lending company that funds small and medium enterprises (SMEs) in Mexico, as well as supports them with know-how and know-who in the fields of management, finance, and taxes. According to CAPEM, there are approximately 4.5 million SMEs in Mexico, most of which are without access to institutional credit. The estimated finance gap for companies that need but do not have access to funding in Mexico is $1.6 billion, according to the IFC (International Finance Corporation, a member of the World Bank Group). CAPEM’s clients are companies with revenue in the range of $200 000 – $5 million. The company’s future business goal is to become a leading expert in funding SMEs in Latin America.
The company was founded in 2014 and currently has a team of 60 employees based in their headquarters in Guadalajara, Mexico. CAPEM is part of the Association of Sofomes of Mexico (ASOFOM), Association of Private Equity and Venture Capital of Mexico (AMEXCAP), and the SME Finance Forum by the IFC. Until May 2021, CAPEM had originated 1035 loans worth $117 million cumulatively. As of June 2021, the company has approximately €30 million worth of outstanding loan portfolio. CAPEM’s portfolio is rated by multiple external international rating agencies, including HR Ratings de México S.A. de C.V. and MicroFinanza Rating S.R.L. (MFR).
The business model of CAPEM is built on prudent financial analysis of the companies they serve, allowing them to identify growth opportunities and issue loans needed for their business scaling. When underwriting, CAPEM approaches each client’s situation individually by evaluating each company’s unique information and applying tailor-made underwriting which helps them to build an in-depth understanding of each business. In addition to lending, a major part of their cooperation with clients is consulting. Their “Smart Money” business consulting program helps all funded SMEs improve their operations in the areas from business plan improvements to financial management and even social impact. Combining the two, CAPEM has all the tools to help their clients grow their businesses sustainably.
CAPEM about the 2020 pandemic
The company's management comments: “Last year, we focused on understanding and learning differences between industries, and turned to fund safer and sustainably growing industries. For the rest, the underwriting had to become more rigorous so funding them wouldn't come at the expense of increased risks. After the pandemic in 2020, we now have a deeper emphasis to see even the smallest detail of industry risks as well as what capacity we can have in times of crisis. The new reality has reinforced our sense of urgency to be increasingly creative, flexible, and focus more on the generation of value in each SME that we finance and advise. Now we evaluate variables that make our company's stress tests more robust.”
CAPEM business loans on Mintos
Annual interest rates
Up to 10%
Average APR*
25%
Average loan amount
€80 000
Non-performing loans ratio (PAR 90**)
1.4%
Average loan term
41 months
Skin in the game
10%
Mintos Risk Score
8
Buyback obligation
Yes
Interest on delayed payments
No
*Annual Percentage Rate
**Portfolio At Risk (overdue more than 90 days)
The Mintos Risk Score for loans issued by CAPEM is 8, with the subscores of 8 for loan portfolio performance, 8 for loan servicer efficiency, 8 for buyback strength, and 4 for cooperation structure.
To ensure clients’ creditworthiness, CAPEM blacklists litigations of the SMEs and the owners, as well as visits the companies and overviews their operations. They also ask for references in their network through the shareholders and chambers of commerce they are affiliated with.
Rodrigo Correa, CEO and Co-Founder of CAPEM: “We see Mintos as a strategic partner because of the potential growth that it could bring us and the opportunity for high-interest rates for individual investors in Europe. The pandemic was a difficult time for most of us because it taught us that nothing is guaranteed. We live in a dynamic world with dynamic businesses and in order to survive we need to be dynamic with the world, but we must always be prepared for the worst case. Covid-19 also brought us opportunities in the market of SMEs with less access to capital. Nowadays they need us more than ever. Our aim is to keep benefiting more clients with the least possible risk for investors”.
How to invest in CAPEM business loans
Mintos has added CAPEM business loans to the Diversified and Conservative strategies. If you want to invest in these loans with a custom automated strategy, make sure to adjust your strategy settings. If you’re investing manually, you can filter the loans on the Primary Market.
About CAPEM
CAPEM lends funds to Mexican small and medium enterprises, as well as supports them with know-how and know-who in the yields of management, finance, and taxes. There are around 4.5 million SMEs in Mexico, most of which are without access to institutional credit. The estimated finance gap (need for funding, but no access to funding) in Mexico is $1.6 billion, according to the IFC. (International Finance Corporation, a member of the World Bank Group). CAPEM was founded in 2014 and is part of ASOFOM (Association of Sofomes of Mexico), AMEXCAP (Association of Private Equity and Venture Capital of Mexico), and the SME Finance Forum by the IFC.
The business model of CAPEM is built on prudent financial analysis of the companies they serve, allowing them to identify growth opportunities and issue loans needed for their business scaling. When underwriting, CAPEM approaches each client’s situation individually by evaluating each company’s unique information and applying tailor-made underwriting which helps them to build an in-depth understanding of each business. In addition to lending, a major part of their cooperation with clients is consulting. Their “Smart Money” business consulting program helps all funded SMEs improve their operations in the areas from business plan improvements to financial management and even social impact. Combining the two, CAPEM has all the tools to help its clients grow their businesses sustainably.
