Chedraui-connected Consupago: 180% total annual cost to borrowers

It can cost borrowers 180% of their loan to borrow from Consupago, which is nearly half-owned by the Chedraui family and was founded by Grupo Chedraui, according to information Consupago provided CONDUSEF – Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros.

Consupago disclosed a 180.6% Total Annual Cost (TAC) to borrowers as of the 4th quarter in 2017, calculated on a $10,000 peso loan for 1 year paid monthly. The Bank of Mexico described TAC as a “standardized measure of the cost of financing, expressed in annual percentage terms that, for informational and comparison purposes, includes all the costs and expenses inherent to the credit granted by lending institutions.”

The 180% loans carried no requirements for borrowers’ minimum income or length of employment, according to Consupago.

Consupago calls itself “market leader in personal loans via payroll deduction.” The company originates loans, nearly all of which are transferred to its affiliate Consubanco.

Consupago is owned in partnership by the Chedraui family and an American company, Sherman Financial Group. Grupo Consupago was 49.8% owned by the Chedraui family and 49.6% owned by Sherman Financial Group as of year-end 2016. Consupago, S.A. de C.V., SOFOM, E.R. and Consubanco are subsidiaries of Grupo Consupago.

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