IIC approves US$10 million loan to Eurocapital S.A. in Chile
Loan proceeds will finance more than 140 international factoring transactions with Chilean SMEs
Washington, D.C., October 20, 2014 — The Inter-American Investment Corporation (IIC) approved a loan of up to US$10 million to Eurocapital S.A. that will support the small and medium-sized enterprise (SME) sector in Chile by financing factoring operations for U.S. dollar-denominated or indexed documents, primarily involving exports by these SMEs.
“This operation reinforces the relationship between the IIC and Eurocapital, which focuses on improving access to appropriate financing for SMEs in all economic sectors in Chile. The loan proceeds are expected to benefit 100 SMEs, and there are plans to carry out more than 140 transactions with SMEs in Chile,” said Ana María Orellana, IIC lead investment officer in charge of the operation.
Factoring has proven to be an effective SME financing tool. Thanks to its speed and simplicity, factoring enables SMEs to achieve portfolio management and monitoring efficiencies by reducing operating costs associated with credit checks and invoice collection.
Operating in Chile since 1998, Eurocapital S.A. purchases, with recourse, invoices, bills of exchange, checks, contracts, promissory notes, and other instruments issued by small and medium-sized enterprises in the course of their operations. Eurocapital S.A. holds a 3.2% share of the local factoring market in terms of net placements (as of December 2013) and currently has 20 offices throughout Chile, including its headquarters. In addition, in 2011, it began to offer financial leasing as part of its financial services for SMEs—this product currently accounts for 18% of the total business portfolio of Eurocapital S.A.
This is the IIC’s fourth operation with Eurocapital S.A. The previous operations benefited more than 100 SMEs in need of working capital across different economic sectors in Chile.
About the IIC
The IIC, a member of the Inter-American Development Bank (IDB) Group, promotes private-sector development in Latin America and the Caribbean with a focus on small and medium-sized enterprises (SMEs). We help companies streamline management processes and provide them with financing in the form of equity investments, loans, and guarantees, as well as innovative technical assistance, advisory services, and knowledge products. In 2013, the IIC approved 71 operations totaling US$415.4 million. Since its inception in 1989, the IIC has approved more than 800 direct loans to SMEs and financial intermediaries, for a total of US$5.21 billion. An additional US$3.01 billion has been mobilized through cofinancing and syndication agreements. For more information on the IIC, visit www.iic.org.
Contact: Ana María Orellana
Telephone: + (562) 2431-3707