Fitch: Mexican Pawnshops, an Evolving Industry

MONTERREY, Mexico--(BUSINESS WIRE)-- Gold prices and exchange rate volatility, amid increasing regulation and competition from microfinance companies, are pushing the consolidation of the pawnshop sector in Mexico, according to a new Fitch Ratings dashboard report. The report also explains the key rating drivers affecting the credit profiles of these entities.

In Fitch's opinion, the evolution of the sector's business model towards unsecured personal lending or pawn lending collateralized with general merchandise and its commercialization, is one of the factors that is driving a partial recovery in profitability for some of the rated pawnshops.

The sector's capitalization ratios are reasonable considering the concentration in a segment with high operational and reputational risks. The entities' funding base is limited and undiversified, although its liquidity is high and sustainable.

The 'Mexican Pawnshops Dashboard' is available on Fitch's website at 'www.fitchratings.com'.

Additional information is available on www.fitchratings.com

Mexican Pawnshops Dashboard

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=870249

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View source version on businesswire.com: http://www.businesswire.com/news/home/20150831005854/en/

Fitch Ratings
Alba Maria Zavala, CFA
Associate Director
+52 8399 9137
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, N.L., Mexico
or
Veronica Chau
Director
+52 8399 9169
or
Media Relations
Alyssa Castelli, +1 212-908-0540
[email protected]

Source: Fitch Ratings

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