IIC Financing Will Enable Nicaragua’S Banco De Finanzas, S.A. To Make Medium- And Long-Term Subloans To SMEs

05/21/2007

More than 100 small and medium-size enterprises will benefit from this US$10 million loan

Washington, D.C.- On May 22, 2007, the Inter-American Investment Corporation (IIC) approved a loan of up to US$10 million to Banco de Finanzas, S.A. (BDF). This operation will provide BDF with long-term funding for onlending to SMEs in Nicaragua. Medium- and long-term financing is of limited availability in the local market. The proceeds will be used to fund medium- and long-term lending to the agricultural, manufacturing, trade, and service sectors. This is the IIC’s second loan to BDF, which has proved to be able and willing to support Nicaraguan SMEs.

According to Banco de Finanzas S.A., "This loan will provide BDF with medium-term funding, which is difficult to obtain in the Nicaraguan financial market, thereby contributing substantially to our strategic goal of providing reasonably-priced medium- and long-term financing to SMEs. To this end, BDF relies on a network of branch offices located in areas with a high concentration of SMEs, which enables us to better serve them."

This operation is expected to have a demonstration effect that will encourage other financial institutions to focus on small and medium-size companies in Nicaragua and provide more services to the sector.

According to Carlos Roa, IIC Financial Institutions and Structured Finance Coordinator, "This operation supports a financial institution that is focused on SME financing and in the last three years has placed US$20.4 million in loans to SMEs, with an average of US$9,316 per operation."

As of December 31, 2006, the IIC had disbursed almost US$40 million in Nicaragua out of a total US$51.2 million in approvals in that country. Four operations, totaling US$585,000, were approved in 2006 under the Small Business Revolving Line (SBRL). The SBRL is a mechanism that enables the IIC to provide standardized loans for small amounts.

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, please visit www.iic.int.

Contact: Carlos Roa/Ana Cecilia Savastano (in Washington D.C.)

Telephone: (202) 623-3955

Email: carlosroa@iadb.org/anas@iadb.org