IIC Enhances Streamlined Financing Mechanism For Providing Small Loans To SMEs In Fifteen Countries In The Region
07/29/2008The loans average US$214,000 and have interest rates tailored to each market
Washington, D.C. - On July 29, 2008, the Inter-American Investment Corporation (IIC) reported to its Board of Executive Directors on the results of its Small Business Revolving Line (SBRL) over the past two years. The SBRL provides standardized loans ranging from US$100,000 to US$600,000 to SMEs in Bahamas, Barbados, Bolivia, Costa Rica, Dominican Republic, El Salvador, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Paraguay, Suriname, Trinidad and Tobago, and Uruguay.
Most of the loans have been to finance working capital or investments in fixed assets for business expansion projects. The IIC currently has an outstanding portfolio of twenty-two SBRL projects in sectors including manufacturing, nonfinancial services, wood, pulp, and paper, agriculture and agribusiness, and health care, among others.
The IIC made substantial changes to the SBRL in order to enhance its scope and relevance, such as increasing from thirteen to fifteen the number of countries where the program is offered, lengthening repayment terms, tailoring interest rates to different markets, and offering financing in a wide range of amounts.
The SBRL, a US$19 million program approved in 2005, complements the FINPYME program (www.iic.int/FINPYME). FINPYME is a diagnostic review and assessment methodology that the IIC makes available to SMEs to help them become more competitive and make it easier for them to access financing. Several SMEs that went through the FINPYME diagnostic review process have received financing under the SBRL.
According to John Beckham, IIC Corporate Projects Coordinator, "Small and medium-size companies are a key source of jobs and foreign exchange in Latin America. This is why the IIC provides them with targeted support so they can consolidate their growth and promote the economic development of the region. It is with this goal in mind that FINPYME and the SBRL were designed as tools that enable the IIC to provide valuable support for SMEs in the region. The IIC will continue to use these tools to replicate their success in other countries."
To broaden the geographic distribution of the Program, especially in countries where the IIC does not have a local presence, agreements have been signed with local agents in Bolivia, El Salvador, and the English-speaking Caribbean.
Among the companies that have received financing under the SBRL are Generifar, S.A. (www.generifar.com) in Nicaragua; Prima S.A. (www.primainteramericana.com) in Costa Rica; and La Francesa, S.A. (www.lafrancesa.com) in Bolivia.
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. In 2007, the IIC reached US$1.2 billion in assets and approved 62 transactions channeling US$470 million to SMEs in the region. 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, please visit www.iic.int.
Contact: John Beckham (in Washington D.C.)
Telephone: (202) 623-3984