SAO PAULO, Jan 13 (Reuters) - Brazilian digital lender

Nubank has signed an agreement with Mexican convenience

store chain Oxxo, run by FEMSA, to expand its cash

deposit and withdrawal network in the North American country,

the firms announced on Monday.

WHY IT'S IMPORTANT

Warren Buffett-backed Nubank, one of the Latin America's

largest firms by market value, has been aiming to scale its

operations in Mexico and Colombia after growing in Brazil, its

home market, where it has more than 100 million customers.

While Nubank's Brazil operations are nearly fully digital,

the lender has been using different strategies to grow in

Mexico, where cash remains a top payment method.

BY THE NUMBERS

The deal will allow Nubank's more than 9 million customers

in Mexico to gain access to Oxxo's over 22,000 stores across the

country, Nubank said, pushing the lender's total presence in

Mexico to over 30,000 stores, including previous partnerships.

Cash withdrawals with a Nubank card will become available at

Oxxo stores in Mexico from Tuesday, while the option to deposit

cash to a Nubank account will start "in the subsequent months,"

Nubank said.

MARKET REACTION

Citi analysts said the agreement is "positive" for Nubank,

as Oxxo's network will expand access to Nubank's client base in

Mexico.

But they said would be "likely costly" and noted that it is

not exclusive, as Oxxo already offers capabilities for other

large banks in Mexico.

"We believe it re-affirms Nubank's commitment to offer

cash-in/out capabilities at a scale, reducing a competitive

disadvantage with incumbent banks in Mexico," the analysts,

including Gustavo Schroden, wrote in a report to clients.