Banking - Peru

Edpymes converting to finance companies to become more competitive

Edpymes converting to finance companies to become more competitive

By -

Specialized microcredit lenders (Edpyme) in Peru are increasingly seeking to develop into finance companies to enhance their competitiveness, and Edpyme Efectiva is the latest example of this trend.

"Considering the significant growth of the Edpymes in recent years, as well as future competition that will be ever increasing, it's reasonable that the Edpymes are looking to be able to keep growing by offering the same products as their competitors," Sergio Castro, project director with ratings agency Apoyo y Asociados Internacionales, told BNamericas.

Edpyme Efectiva would become the fourth Edpyme to seek the qualification since 2008 and would become the eighth finance company regulated by financial services regulator SBS.

An Edpyme Efectiva spokesperson said the company had submitted its application for qualification as a financial company to SBS, and was expecting a decision this month.

A report in Peruvian business daily Gestión quoted company president Manuel Tudela as saying that if the qualification is approved, the company would initially concentrate on lending through electronics retailer Tiendas Efe and would later issue credit cards.