PAGE 1 l Teradata Magazine l Q3/2010 l ©2010 Teradata Corporation l AR-6187

Through countless stories like Marlene’s,

Banco Compartamos has demonstrated the

transformative effect its unique vision has had

on impoverished communities. More than

a decade ago, the company recognized that

accelerated population growth in Mexico had

surpassed the availability of jobs, leading many

people to develop small businesses to make a

living. In response, it began offering financial

services to low-income entrepreneurs.

The bank provides loans (micro-credits) and

insurance services, including free life insurance

to all clients. Typical loans are about US$500

and are paid off in 16 weeks. “It’s a small

amount of money compared with traditional

products of banking institutions, but that’s why

we are a very different kind of financial institu-

tion,” explains COO Federico Hernandez.

Clients consist of low-income entrepre-

neurs—98% of whom are women—in search

of capital to create a better future for their

families. The clientele includes small busi-

nesses that provide services and produce food,

clothing, and arts and crafts.

Growing PainsEstablished in 1990 as a nonprofit, Banco

Compartamos became a financial institution

Small loanS,

HuGe ImPactMicro-financing from Banco Compartamos

empowers individuals to transform their communities. by Jackie Zack

Growing up in southern Mexico, Marlene del Carmen Godoy Gomez learned to make dresses from her grandmother. When she decided to start her own dressmaking business, Marlene turned to Banco Compartamos for credit to purchase thread, buttons, needles and cloth. As her business grew, she obtained more credit to buy addi-

tional sewing machines, and she began her own line of bags and purses. Eventually she branched out, opening a cybercafe that offers mobile phone repair services. “I tell people to get Compartamos credits and to invest in their business,” she says.

PAGE 2 l Teradata Magazine l Q3/2010 l ©2010 Teradata Corporation l AR-6187

Ph

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“The CEO is seeing the success of this

data warehouse project, because we

have the right information at the right

moment, and he has access directly.”

—Federico Hernandez,

COO, Banco Compartamos

in 2000. By the time it began operating as a

commercial bank in 2006, it was encountering

significant business challenges. Among the

problems were increasingly high risk of fraud

and less-than-optimal customer service.

To address these issues and create

opportunities, Banco Compartamos began

evaluating data warehouse solutions that

could quickly provide up-to-date informa-

tion for analysis to accelerate fact-based

decision making and reduce processing

time for credit applications.

“We wanted to offer our customers different

products and services, but to do that required

a single, online, integrated, customer view to

better segment customers and to provide them

the right choice,” says Hernandez.

The organization also needed to be able

to predict seasonal product behavior and

profitability, as well as reduce business users’

dependence on IT to develop reports. “One

of the most important objectives was to

have access to the information in the right

moment when we needed it,” Hernandez

recalls. “In the past, we had access, but some-

times we had to wait at least a week to get the

right information.”

Overcoming ObstaclesUltimately, the bank turned to Teradata.

As part of the initial project, it utilized

Teradata’s visual business discovery and

EDW roadmap to create a visual planning

model and a business plan to illustrate the

concepts and values the EDW would address.

The roadmap enabled the company to under-

stand strategic and operational objectives

and to establish the type of data required to

accomplish those objectives.

“One of the best experiences was that we

made a roadmap to start working together,”

Hernandez says. “This was very important

because we were able to involve the main users

in the project. Once we made specific goals, we

were able to develop the project phases to reach

the end results. It was easier for the IT team

to deliver results to the business areas and was

crucial for acceptance of the project.

“There were other vendors that offered a

variety of solutions, but Teradata had specific

financial and banking models that were

already in place,” he explains. “It enabled us to

adopt the best practices at the beginning with

immediate results that we could present to our

main business units.”

Ready to RollWith assistance from Teradata Professional

Services consultants, Banco Compartamos

began implementation in September 2007.

“We made the implementation by phases.

This allowed us to prioritize the objectives of

the main users to acquire reachable results,”

says Hernandez. “It was a very good approach

because we were able to align the expectations.”

For starters, data regarding customers,

employees, credit, insurance and risk were

consolidated so the organization could:

> Enhance visibility and provide easier

access to consistent, comprehensive

information and feedback for better

decision making

> Provide single-view reports and dash-

boards containing business results and

goal achievements from different lines

of business

> Gain comprehensive knowledge of

customers and their financial behavior

> Create cost savings in time and people who

had been focused on information consoli-

dation, validation and maintenance

The bank also accelerated analysis of critical

business information, including sales and credit

PAGE 3 l Teradata Magazine l Q3/2010 l ©2010 Teradata Corporation l AR-6187

tHe cOmPany: A micro-finance institution based in Mexico City, Banco

Compartamos focuses on contributing to Mexico’s development by providing finan-

cial services to low-income entrepreneurs.

tHe cHallenGe: In 2007, the organization

recognized the need to maintain sustainable and

profitable organic growth, quality of assets and

product diversification. However, multiple versions

of information, data inconsistencies and ineffective

distribution inhibited its goals.

tHe sOlutIOn: Data from throughout the financial institution was centralized

on an enterprise data warehouse and organized for better integration and analysis.

tHe Results: Banco Compartamos has expanded operations, services and its

clientele. It has grown to serve more than 1.5 million customers, becoming the

largest micro-finance institution in Latin America.

executIve summaRy

By all accounts the enterprise data

warehouse initiative helped the organi-

zation reach goals that could not have

been achieved before. By the end of

2009, the bank saw:

As a result, Banco Compartamos is now

the largest micro-finance organization

in Latin America.

tHe PayOff

Active clients reach 1.5 million, up 30%

The average quarterly customer growth increase by 51%, to 93,764

The average quarterly total loan portfolio expand to 33.4%

Annual net income jump 33% over the previous year

PAGE 4 l Teradata Magazine l Q3/2010 l ©2010 Teradata Corporation l AR-6187

trends, portfolio risk, profit and loss, and key

performance indicators (KPIs). For example,

it can monitor daily sales KPIs—such as total

number of credits disbursed, loan capital port-

folio, loan average per client, non-performing

loan ratio and credit recovery. This enables the

organization to identify risky customer profiles

based on demographic and behavioral analysis,

resulting in better risk management and a

healthy portfolio.

Additionally, the bank’s commercial

division now has access to unique cus-

tomer information, including general and

demographic data, and customer credit

performance scores. It can perform historical

analysis of payment behavior to set business

rules and parameters while providing fast and

accurate answers whenever needed.

“The CEO is seeing the success of this

data warehouse project, because we have the

right information at the right moment, and

he has access directly. It is the same for the

legal and governmental authorities and the

board of directors,” Hernandez says. “As a

public organization, that is very important

to us.”

The EDW solution has automated the

generation and distribution of 500 daily

reports (formerly weekly) on business results.

These reports are sent to the appropriate

audience—from the board of directors to the

branch managers—many of whom access

them through mobile devices.

looking to the futureHaving achieved impressive growth in

clients, loan portfolio and net income, Banco

Compartamos is already the largest micro-

finance organization in Latin America. And it

is poised to continue its mission and pursue

plans to expand operations to other countries

for the benefit of the bank, its clients and the

greater community.

“We already have the solution with the

data warehouse to integrate information

if we purchase a financial institution,”

Hernandez notes. “We are able to start think-

ing about the future, and we are prepared to

make this happen.”

Whatever the future brings for Banco

Compartamos, it will stay true to its mission

of enabling entrepreneurs to transform their

communities one micro-loan at a time. T

Jackie Zack is a freelance business, marketing

and technology writer based in Brighton, Mich.

BeHInd tHe sOlutIOn:Banco Compartamos

DATABAse: Teradata 13

PlATform: 3 Teradata data

warehouse

environments—

production, contingency

and development

Users: 10

DBAs: 1

DATA moDel: Logical—Teradata

Financial Services

Logical Data Model

Physical—3rd Normal

Form

oPerATing sysTem: SUSE Linux 10

sTorAge: 1,289GB—production,

1,289GB—contingency,

620GB—development

TerADATA UTiliTies: Teradata Tools and

Utilities 13

Tools/

APPliCATions:

Products from Essbase,

Hyperion Interactive,

Informatica, Microsoft

and Oracle

“as a micro-finance institution, our business is to generate opportunities of development in communities by providing financial services to the low-economic segment, allowing our clients to invest in their most important assets—themselves,” says Federico Hernandez, Coo of Banco Compartamos.

The bank has been success-ful in driving development in mexico by generating social, economic and human value through its business model, as Hernandez explains:

“social value. Banco Compartamos promotes development by providing financial services to the greatest number of people in the shortest possible time.”

“economic value. We have created a profitable and strong institution in which private capital may participate, making the industry more attractive for others to compete.”

“Human value. We trust people, we trust in their word, their willingness to succeed, and their ability to develop their skills. This is why we promote means that offer clients and employees the opportunity to become better people.”

makInG a dIffeRence