Introduction to CAME and Its Current Situation
Consejo de Asistencia al Microemprendedor (CAME) is a sociedad financiera popular (sofipo) currently facing a severe solvency crisis. Led by Pablo Varela, CAME has accumulated a debt of 2,679 million pesos with private and development banks by the end of 2024, accounting for 43% of the total sector debt. This situation has affected both its savers, who face difficulties accessing their funds, and its creditors, including commercial banks, development institutions, and other organizations.
CAME’s Financial Performance
- Total debt: 4,527 million pesos
- Total assets: 5,380 million pesos
- Credit portfolio in force: 1,724 million pesos (as of December 2024)
- Traditional deposit capture: 1,599 million pesos, with 1,448 million in time deposits and only 151 million in immediate demand accounts
Challenges Faced by CAME
Since early April 2023, CAME has displayed worrying signs for its 1.3 million clients:
- Closure of branches
- Intermittent services
- Mobile app malfunctions (Techreo platform)
- Lack of updated capitalization information
- Withdrawal of ratings by two credit evaluation agencies
The “War of Rates” and Its Impact on CAME
In late 2023, a “war of rates” began, driven by various financial institutions, especially digital ones. These institutions offered returns close to 15% to attract online savings, aligning with the then-current level of Banco de México’s reference rate.
CAME participated in this “war,” offering up to 16% annual returns for terms of 12 to 24 months. However, this strategy led to reduced interest spreads between the cost of funds and credit returns, deteriorating CAME’s profitability.
Moreover, CAME faces a significant problem of delinquency, with an adjusted index of 24.8% at the end of 2024, according to HR Ratings.
Persistent Losses and Insufficient Capital
Despite receiving capital injections of 754 million pesos over the past three years, CAME’s accumulated losses exceeding 1,100 million pesos could not be reversed.
HR Ratings reported that CAME’s capitalization index closed 2024 at a mere 8.2%, placing the institution in a precarious situation.
As of now, neither the CNBV nor any other financial authority has issued an official statement regarding CAME’s situation, which is the sixth-largest sofipo in Mexico by assets and has been operating for over three decades in the financial sector.
Key Questions and Answers
- What is CAME and why is its situation important? CAME is a sociedad financiera popular (sofipo) facing a severe solvency crisis. Its situation is significant as it impacts both its savers and creditors, affecting the broader financial sector.
- What led to CAME’s current predicament? Participation in the “war of rates” and reduced interest spreads between funding costs and credit returns have contributed to CAME’s deteriorating profitability. Additionally, high delinquency rates and insufficient capital have exacerbated the situation.
- What actions have been taken by financial authorities? As of now, no official statements or interventions have been issued by the CNBV or other financial authorities regarding CAME’s situation.
