Background on Sofipos and CAME
Sofipos, or Popular Financial Societies, are financial entities in Argentina that offer savings and credit services to micro-entrepreneurs. CAME, or the Council of Small and Medium Enterprises, is an organization that represents these Sofipos. Recently, CAME has faced solvency issues, prompting concern over the stability of Sofipos and their ability to protect depositors’ savings.
Prosofipo’s Role and Growth
The Fondo de Protección de Sociedades Financieras Populares y de Protección a sus Ahorradores, or Prosofipo, is a fund established to safeguard depositors’ savings in Sofipos. According to financial information, Prosofipo’s total assets grew by 149% in 2024, reaching a recorded value of 597 million pesos.
Prosofipo’s primary function is to cover deposits for each Sofipos member, up to 25,000 Units of Account (Udis), equivalent to approximately 211,000 pesos. The fund’s assets mainly consist of regular monthly contributions from operating Sofipos, with minor contributions from the federal government.
Impact of Increased Savings in Sofipos
The surge in savings within the Sofipos sector, particularly among digital entities, has contributed to Prosofipo’s growth. By the end of 2024, total savings across all 34 operating Sofipos amounted to 151,000 billion pesos, marking a real annual variation of 173%.
Prosofipo’s Future and CAME’s Challenges
Authorities have yet to comment on the future of CAME and its financial and operational issues. However, if CAME’s revocation is determined, Prosofipo will be responsible for paying each depositor the corresponding insured deposit amount.
As of December, CAME’s savings balance was 1,599 million pesos, with 90% held in time deposits. CAME participated in a “rate war,” offering investment products with returns exceeding 15% annually. However, by the end of 2024, CAME’s savings capture had decreased by 22% compared to the same period in 2023.
Recent CNBV Actions
The Comisión Nacional Bancaria y de Valores (CNBV) recently revoked the licenses of two Sofipos, Auxi and Impulso para el Desarrollo. Prosofipo must now intervene in these cases and settle outstanding matters, such as those involving Operadora Reforma.
Key Questions and Answers
- What is Prosofipo? Prosofipo is a fund designed to protect depositors’ savings in Sofipos, up to 25,000 Units of Account (Udis), equivalent to approximately 211,000 pesos.
- Why is Prosofipo’s growth significant? The substantial increase in Prosofipo’s assets (149%) indicates that more resources are available to safeguard depositors’ savings amidst Sofipos’ solvency issues.
- What are CAME’s current challenges? CAME faces financial and operational difficulties, with a 22% decrease in savings capture compared to the previous year. Additionally, two Sofipos under CAME’s umbrella had their licenses revoked by the CNBV.
- What will happen if CAME’s revocation is determined? If CAME’s revocation is confirmed, Prosofipo will be responsible for paying each depositor the insured deposit amount.
