IIC Operation Will Put Innovative Financial Service Within The Reach Of Lower-Income Households In Brazil
11/19/2007IIC equity investment of up to R$2 million and convertible loan of up to R$3 million to Unik, S.A. to support the growth of a service card company
Washington, D.C. - On November 20, 2007, the Inter-American Investment Corporation (IIC) approved an equity investment of up to 2 million Brazilian reais and a convertible loan of up to 3 million reais to Unik, S.A. Unik is a Brazilian company that provides basic financial services to pensioners and lower-income workers who do not have access to bank services in Brazil. Holders of the Unik card may use it to make purchases in a network of pharmacies, small shops, grocery stores, and retail outlets in urban, semiurban, and rural areas.
According to Carlos Roa, Financial Institutions and Structured Finance Coordinator, the IIC investment fulfills three main purposes: i) help improve access to basic financial services for lower-income workers and pensioners; ii) increase the volume of business for small shop owners linked to Unik's network; and iii) enable Unik to recapitalize and invest in new product development and the technology it needs to grow and consolidate.
This operation also demonstrates the IIC's commitment to working with other areas of the Inter-American Development Bank (BID) Group. The IDB's Opportunities for the Majority initiative referred this project to the IIC as the best source of support for Unik. According to Ana-Mita Betancourt, Manager of the Opportunities for the Majority Sector Office, "This innovative project is consistent with the Opportunities for the Majority initiative, which leverages all of the Bank Group's resources towards promoting private sector solutions to development challenges. Companies like Unik S.A. that engage with low-income populations have significant growth potential."
It is expected that by 2012 there will be one million active Unik cardholders; there are currently approximately 250,000.
The financial plan includes the participation of the International Finance Corporation (IFC) to complete the financing for the operation. IFC authorities are expected to approve the transaction within a few weeks.
Contact: Carlos Roa/Santiago Cat (in Uruguay)
Telephone: (202) 623-3955