Last week, Bamboo Capital Partners, along with other investors, announced it was exiting Banco Popular, a microfinance bank in Honduras. Its shares are being taken over by new shareholders Incofin and Triple Jump, with existing shareholders, development banks BIO and FMO, increasing their positions.
During the period 2012–22, the lender experienced a treble-digit loan portfolio growth and a more than sevenfold growth in its savings portfolio. Banco Popular is the leading microfinance institution in Honduras, with more than 60,000 clients, according to the bank.
The microfinance bank’s total assets increased from $129m to $171m between 2019 and 2021. Despite the Covid-19 pandemic, Banco Popular’s net loans kept increasing in 2020, albeit at a slower pace.
Bigger peers in the region had a more difficult time in 2020, perhaps due to their more established position in the market.
Mexico’s Banco Compartamos increased net loans from 2017 to 2019 but then experienced a big decrease in 2020, likely due to the effects of the pandemic. In 2021, net loans bounced back to $1.27bn.
Banco Solidario of Bolivia experienced the same phenomenon, albeit to a lesser extent. Net loans for the lender dipped to $518m in 2020 but increased to $590m at the end of last year.
Microfinance institutions are expected to keep growing, and now traditional banks are entering the space as well. As the sector gets bigger, it also must find a balance between rewarding shareholders and fulfilling its original goal of poverty alleviation by lending at responsible rates.
