IIC Provides Up To US$5 Million In Financing To Banco Pichincha C.A. In Ecuador

07/09/2007

The proceeds will be onlent to small and medium-size Ecuadorian companies

Washington, D.C.-On July 10, 2007, the Inter-American Investment Corporation (IIC) approved a loan of up to US$5 million for Banco Pichincha C.A. to provide financing for small and medium-size Ecuadorian companies with sales between US$100,000 and US$1 million. These companies will be small, family-owned businesses that have limited access to technology and financing and are vulnerable to fluctuations in the economic cycle.

Banco Pichincha is one of the largest banks in Ecuador's financial system. As of December 2006, it had 234 points of service throughout the country, 469 ATMs, and 1,252,859 clients. Pichincha C.A. is the market leader in terms of service network, deposits from the public, and loan portfolio. Its holdings in the financial sector are grouped under Grupo Financiero Pichincha, which offers insurance, trust fund, microfinance, securities brokerage, and other services. Outside Ecuador, the bank operates in Colombia, Peru, Panama, and Miami.

According to Carlos Roa, IIC Financial Institutions and Structured Finance Coordinator, "This operation is expected to increase Banco Pichincha's SME portfolio by approximately 100% of the amount of the IIC loan. The IIC's goal is to provide financing to approximately twenty different small businesses in Ecuador. The advantage for the bank is that it will not incur an asset/liability mismatch."

Fifty-one percent of the bank’s portfolio consists of loans to the commercial sector, with 17 percent of these going to small enterprises. Banco Pichincha finances most of its portfolio with short-term funding.

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/Sandra Reyes (in Colombia)

Telephone: (202) 623-3955

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