IIC And Central American Banks Sign Agreement To Support SMEs
10/03/2007San Salvador – Central American banks will use an innovative Inter-American Investment Corporation (IIC) program to improve access to credit for small and medium-size companies.
Under an agreement signed Wednesday during the Microenterprise Forum, six banks will join the IIC’s FINPYME (Financiación Innovadora de PYME) initiative. The FINPYME methodology is an innovative diagnostic tool for evaluating small and medium-size enterprises that seek bank credit.
The agreement was signed by Jacques Rogozinski, General Manager of the IIC, and by executives from Banco Improsa in Costa Rica, Banco HSBC in El Salvador, Banco Internacional in Guatemala, Banco del País in Honduras, and Banco de Finanzas in Nicaragua. Panama's Globalbank will also take part in this initiative.
During the ceremony, Mr. Rogozinski explained that the FINPYME program was launched earlier this year in Central America, Panama, and Dominican Republic in order to form partnerships between SMEs that need access to credit, universities that will evaluate them, and banks that are able to meet their financing needs.
"We are coming to the second part of the equation. The first was the universities. Once they pass their exams, the SMEs will be able to apply for credit," according to the General Manager of the IIC. The IIC is the IDB Group institution that targets small and medium-size companies.
FINPYME is a tool for gathering data that will be used to evaluate how SMEs are managed. The evaluations pinpoint areas that need strengthening in order for a company to become more competitive and more likely to be able to borrow.
As the participating banks become familiar with the program's methodology, they will be able to make better-informed decisions on the applications filed by companies that have been reviewed.
The IIC took this opportunity to provide Microenterprise Forum participants with a status report on the FINPYME program.
In the first stage of the program, seven universities and business schools of the region are performing diagnostic reviews of more than 200 SMEs with more than 23,000 employees. These SMEs need more than US$175 million in financing. The IIC expects the evaluations to be finished by the end of the year.
The IIC also announced that FINPYME has been so well received in the region that several donor countries have expressed an interest in providing support for extending the initiative to other parts of Latin America and the Caribbean and in providing technical assistance to strengthen the SMEs that have undergone the evaluation process. The Republic of Korea also provided support for launching the program.
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, please visit www.finpyme.org and www.iic.int
Contact: Pamela Murphy
Telephone: (202) 623-1835