Advance America May be Sold

Advance America shares surged yesterday when it reported that Grupo Elektra offered to buy all of the payday lender for $10.50 per share.

Grupo Elektra is Latin America’s largest retail consumer credit company. Their subsidiaries run stores in Mexico, Peru, Honduras, Guatemala, Panama and Brazil. Business Week ran a story a few years ago that went into detail about their micro-credit product. Business Week pointed out that even though interest rates can be as high as 250 percent on their loans, default rates are “infinitesimal.” They attribute that record to the efforts of the company’s notorious motorcycle-riding collection agents.

It would appear the Fair Debt Collections Practices Act will be a new factor in their transition to the United States.