IIC Provides Financing That Will Benefit Thousands Of Rural Producers In Mexico

10/04/2000

The investment will benefit Mexican rural producers with long-term financing and will result in an overall increase in efficiency in the tortilla production system WASHINGTON, D.C. - On September 28, 2000, the Board of Directors of the Inter-American Investment Corporation (IIC)1 approved a US$10 million loan to Almacenadora Mercader, S.A. (Almer), a private grain warehousing company that plays an important role in the tortilla production chain in Mexico.

IIC funds will provide up to 10,000 Mexican farmers a year with a source of financing. This innovative system of financing will protect them from possible price volatility, allowing them to commercialize their products when market prices are more favorable. In addition, through the program, farmers will have access to modern risk-management instruments, such as hedging and insurance coverage that would not be available to them on an individual basis.

Through this project, IIC will play an important role in providing financing to the corn sector, thus increasing the overall efficiency in the tortilla industry. This increase in efficiency will translate into lower production costs for tortilla producers and, consequently, lower final prices for tortilla consumers.

It is expected that the project will create 132 direct jobs, and generate approximately $20 million per year in added value over the projected period.

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1 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. The IIC has thirty-six member countries: twenty-five in Latin America and the Caribbean and eight in Europe, plus the United States, Japan, and Israel. For further information on IIC's activities please visit our web site at www.iadb.org/iic/ or contact Mr. Jorge Roldán at 202-623-3948.

Contact: Steven Reed

Telephone: (202) 623-3981

Email: stevenr@iadb.org