IFC And IIC Make Equity Investment In Unik, A Payroll Credit Card Company Controlled By Rio Bravo Investimentos
06/02/2008With this operation Unik will be able to improve access to financial services for lower-income households
São Paulo, Brazil – On June 3, 2008, the International Finance Corporation (IFC), a member of the World Bank Group, and the Inter-American Investment Corporation (IIC), a member of the Inter-American Development Bank (IDB) Group, announced the acquisition of a 20% participation in Unik, a leader in payroll credit cards that also provides financial services to lower-income workers and pensioners.
Since 2004, Unik has been controlled by Rio Bravo Investimentos, an asset manager owned by former Brazilian Central Bank President Gustavo Franco. The company was repositioned as a platform to provide financial services to lower-income households who have limited access to banking services. Unik also offers its customers other services such as insurance, bill payment, and cell phone credit refills.
With this operation, the IFC will have a 12% share in Unik, while the IIC will have an 8% participation. Unik has approximately 750,000 cardholders, including employees from over 3,000 private and public companies and pensioners.
In 2007, the company revenues totaled 193 million reais, up 57% from the previous year. Part of the expansion of the company’s operations is due to the increased customer base, which grew 40%, and an expanded network of businesses that accept the Unik card.
According to José Roberto Kracochansky, the CEO at Unik, "Payroll cards are an effective way to introduce basic financial services to lower-income consumers, and for them to be able to purchase necessities that might otherwise be unavailable to them because of income restraints. We are pleased that the IFC and the IIC are supporting Unik, both with financial resources and with a vote of confidence in the company’s business model."
With the entry of the new partners, Unik will start the process of obtaining its first FIDC (Credit Receivables Investment Fund), for an amount of 240 million reais; these resources will be used to increase credit supply to the company’s customer base.
Andrew Gunther, General Manager of the IFC in Brazil said: "The IFC is focusing on innovative entrepreneurial projects that expand and enhance financial access for lower-income populations, as well as for microenterprises and SMEs. This project enables the IFC to support a financial intermediary that seeks to reach an underserved sector and provide more financial services in the Brazilian market."
Santiago Cat, the IIC investment officer in charge of this operation, said: "In terms of economic impact, it is expected that this operation will help improve access to basic financial services for lower-income households, improve business for merchants and commercial establishments in urban, semi-urban, and rural areas, and increase access to financing for MSMEs."
About the Inter-American Investment Corporation (IIC)
The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, visit www.iic.int
Link to this article in Portuguese language
Contact: Santiago Cat (in Uruguay)
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