Argentina Microfinanzas SA (AMSA) – launched pilot credit operations in Mendoza, Argentina, in late 2004. Mendoza, located near the border with Chile, represents the fifth largest urban agglomeration in the country with one million inhabitants and is the centre of the Argentine wine industry.

The institution’s 24 full-time employees manage an active client base of 1,300 clients. Since starting operations, AMSA has disbursed 7,600 loans and USD 9 million. Credit quality has been high throughout this time with portfolio-at-risk (PAR30)* typically around 2% and historical loan losses of only 1% of the loan portfolio. AMSA is close to sustainable operational breakeven, with monthly revenues in January 2009 of USD 81,000 and a gross operating profit of USD 4,000 for a loan portfolio of USD 1.4 million.

The virgin state of the Argentine microfinance industry, coupled with an expanding micro and small enterprise sector, provide AMSA with an attractive growth opportunity. The institution is looking to expand its activities to the main urban centres in Argentina over the next few years, focusing first on micro enterprise lending and then extending its target segment to include small and medium businesses. In the longer term, AMSA aims to become a leading, regulated financial institution, offering a broad spectrum of financial services to its target segment of micro and SME clients.

* PAR30 is measured as loans in arrears from 30 days, i.e. loans featuring late payment of one or more instalments over 30 days at the end of each calendar month.