The hot news in Central America is the closing of the largest micro-finance bank (BanEx) in Nicaragua. The owners/investors did not inject the $32.0M of new capital needed to save the bank. That's a large sum, but doesn't tell the whole story. They did manage to pay off all their depositors. However, when you liquidate a bank that's highly leveraged - lots of big loans from outside sources to supply the funds for the bank's loan portfolio - there may not be sufficient recovery or payback of outstanding client loans to pay off creditors in the end. With delinquency running higher than 40%, rumors have mentioned around $100.0M in ultimate losses. Ouch!!!
That micro-finance bank and maybe 2 others have the goal of expanding regionally because no one country in the region is supposedly large enough to support the desired high growth rate envisioned by the Board of Directors and outside investors. BanEx was just starting its expansion strategy, beginning in Honduras, which has now fizzled. A medium-size micro-finance bank in El Salvador wishes to do the same, but so far has only managed to acquire one entity in Mexico. The surprising thing is the same investors found in BanEx financially back the other entities wishing to expand throughout Central America. The largest Honduran MFI is crippled and up for sale. It will be very interesting if said regional expansion strategy continues or abruptly comes to a halt for the remaining players.
I'm of the mind that politics had a lot to do with the liquidation of BanEx, but have no proof nor expertise to carry the argument. Capitalist funds making money off the backs of the poor do not resonate as well as socialist funds supplied to help alleviate poverty.