Russian collectors and microfinance organizations will master the debt market of Mexico

A number of participants in the Russian microfinance and debt collection market have entered the Mexican market. Experts consider the direction interesting and promising for the promotion of domestic technologies. But they emphasize risks, from cultural to sanctions, which can create difficulties with funding.

The online auction for the sale of overdue debt Debex, the collection agency “Pravo Online” and the MFO “E-Kapusta” began working in the Mexican market, representatives of the companies told Kommersant.

The market in Russia “has hit the glass ceiling for many reasons, including due to excessive regulation, which becomes an incentive for many companies to open new directions,” note the microfinance SRO “MiR”. However, for any company that is not the largest, entering foreign markets is “a serious challenge that requires the attraction of considerable additional resources, as well as readiness and determination for internal changes,” the collection association NAPKA emphasizes.

The Latin American market cannot be called new for Russian financial companies. Thus, Debex is already operating in Argentina and Chile. Joy Money had plans to enter the Latin American region. Several companies with Russian roots operate in Mexico, and relatively successfully (ID Finance, Lime Credit, Kreditech).

“On the one hand, the financial markets of Latin America for fintech companies represent a “blue ocean” – they are high-margin and at the same time have the potential for significant growth,” believes Ivan Uklein, senior director for bank ratings at the Expert RA agency. “On the other hand, entering markets with the level of development of institutions and judicial systems characteristic of developing countries has a number of risks.”

According to the general director of E-Kapust, Alexander Gerasev, the Mexican market is “quite large, in terms of population and even somewhat similar in economic structure to the Russian market.” At the same time, the conditions for accessing it are “quite loyal.” “The country has comfortable working conditions for foreign companies. There is no excessive regulation,” explains Debex CEO Marat Brook. “The market for the collection and sale of overdue debts in Mexico is just emerging.”

The microcredit market in Latin America was worth $33.92 billion in 2023. It is expected that in the coming years it will develop at an average annual growth rate of 3.9% and will reach $47.87 billion in 2032. This makes the direction “an attractive goal, including for Russian companies,” says Maxim Pashchenko, CEO of IT Smart Finance Group.

Among the problems of Latin American markets are the poor development of payment systems, low payment discipline and a generally low level of penetration of financial services among the population, notes entrepreneur in the field of international microfinance Georgy Shabad. “There is a certain mentality in the country that we can encounter both on the part of employees and on the part of debtors,” adds Valery Zotkin, head of the Pravo Online collection agency.

“In addition to the specifics of doing business in a particular country, we have to take into account the general difficulties with Russian companies attracting funding for development abroad. These risks may negatively affect the financial stability of the parent company,” believes Andrey Ponomarev, CEO of the online financial platform Webbankir.

Among the risks, it should be noted the volatility of local currencies against the dollar – when expanding to foreign countries, assets are nominated in local currencies, but entry into these markets occurs in dollars, says Moneyman CEO Alexander Pustovit.

“On the one hand, Mexico has not introduced a sanctions regime against Russia; the country has repeatedly emphasized its neutral position,” says Kira Vinokurova, partner at Pen & Paper. “On the other hand, Mexico, as a member of the UN, has confirmed its readiness to comply with the sanctions of this organization against Russia , if they are introduced.”

Polina Trifonova