IIC Grants Innovative Loans To Microfinance Institutions In Bolivia, Ecuador, El Salvador, And Nicaragua

11/30/2004

The four operations, totaling up to US$7.5 million, are in line with the goals set in the Declaration of Nuevo León

WASHINGTON, DC – On December 1, 2004, the Inter-American Investment Corporation (IIC) approved separate loans to four microfinance institutions: Caja Los Andes S.A. F.F.P. in Bolivia (US$2 million), Banco ProCredit S.A. in Ecuador (US$2.25 million), Banco ProCredit S.A. in El Salvador (US$2 million), and Financiera ProCredit S.A. in Nicaragua (US$1.25 million). These four operations follow the private sector development guidelines laid out at the Special Summit of the Americas, held at Nuevo León, Mexico, in January 2004, which encourage the utilization of the banking sector to channel loans to private micro- and small enterprises in Latin America and the Caribbean.

Caja los Andes is the largest nonbanking financial institution in Bolivia and the second largest serving the domestic microfinance market. Caja los Andes grew out of the Pro-Crédito NGO, which was established by a German development agency to provide financial services to microenterprises in Bolivia. It became a private financial fund in 1995.

Banco ProCredit S.A. is a key player in Ecuador's microfinance sector. More than 70 percent of its outstanding loan portfolio is for loans of less than US$10,000, with an average of approximately US$2,000. Banco ProCredit's network of branch offices, some of which are in rural areas, enable it to provide financing for clients that do not have access to the traditional banking system.

Banco ProCredit S.A. in El Salvador (formerly Financiera Calpiá S.A.) is a financial institution that focuses on lending to microenterprises and small businesses. As in the three other countries covered by this set of operations, such enterprises are a major source of jobs. Banco ProCredit and the three other institutions benefiting from these operations are part of a worldwide network of banks and financial institutions oriented to microfinance.

In Nicaragua, Financiera ProCredit S.A. is one of the country's leading financial institutions. Ninety-nine percent of its loan portfolio is made up of loans of less than US$10,000; the average loan size is US$881. Eighteen percent of Financiera ProCredit's outstanding loans are self-build housing loans.

The four loans are the IIC's first in conjunction with the Inter-American Development Bank's Multilateral Investment Fund, arranged as parallel transactions on a pari passu basis. They are also the IIC’s first with a world-class specialist in microfinance banks, Germany’s Internationale Micro Investitionen Aktiengesellschaft (IMI), which has years of experience and a large microfinance investment portfolio worldwide. IMI acquires equity participations in microfinance institutions in transition and developing countries to provide them with a corporate structure so they can give efficient banking services to segments of the population that other banks serve poorly or not at all. The Inter-American Investment Corporation is a multilateral financial institution that is part of the Inter-American Development Bank 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 borrowing member countries by stimulating 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 its Web site at www.iic.int.

Contact: Steven Reed/Jorge Ciurlizza

Telephone: (202) 623-3981

Email: stevenr@iadb.org