Davivienda El Salvador

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Project Number: 
Expected Consideration Date by the Board: 
Date Posted: 
Banco Davivienda Salvadoreño S.A. (“Davivienda ES”)
Sponsoring Entity: 
Not applicable
Financing Requested: 
Up to US$10 million
Financial Services
San Salvador, El Salvador
Scope Objective: 

The proceeds of this IIC loan to Davivienda ES will be used to provide financing to eligible small and medium-sized enterprises (SMEs) in El Salvador in various sectors of its economy.

The financial institution was established as a public bank and was one of the first banks of any kind in the country. It led the way in establishing and developing the Salvadorian financial system and was responsible for issuing the national currency.

Toward the beginning of 2006, it was acquired by the Banistmo group. By the end of that year, the Banistmo group was itself acquired by the international financial group HSBC, which changed the bank’s name to to Banco HSBC Salvadoreño. Finally, in 2012, the bank was acquired by Colombia-based Banco Davivienda and became Banco Davivienda Salvadoreño S.A., or Davivienda El Salvador, currently the second largest bank in the local financial system in terms of assets.

Davivienda ES has 57 branches throughout the country, 11 in-house mini branches for corporate clients, 12 express branches, a mortgage lending center, and 255 automatic teller machines.

Environmental Review: 

Environmental and Labor Issues:

This is a category FI-2 project according to the IIC’s Environmental and Social Sustainability Policy because the subprojects in the financial intermediary’s current or future portfolio are considered medium risk. Davivienda ES has an Environmental and Social Management System (ESMS) in place, with an environment officer in charge of conducting environmental reviews of the institution’s lending operations to ensure they are in compliance with the ESMS. Implementation of the ESMS began in 2006, and the institution has policies and procedures in place that have been approved by senior management. The ESMS is designed to comply with domestic environmental and labor regulations; the Equator Principles, which it has followed voluntarily since 2008; and the IFC’s Performance Standards, which it began applying this year. The bank’s ESMS includes a list of activities that cannot receive funding (with criteria based on international conventions, local regulations, and the standards of the IFC and other international financial institutions), an environmental categorization of lending operations that takes into account sensitive sectors, the drafting of environmental management/performance reports, and monitoring of environmental compliance of the operations in the institution’s portfolio. Since it began operating as a Davivienda subsidiary in El Salvador, the institution has been adjusting some of its procedures to bring them in line with those of Davivienda Colombia.

To enable the borrower to better understand the IIC’s requirements, Davivienda ES will be required to attend the IIC’s environmental training workshop for financial intermediaries. The subprojects financed with IIC funds will be subject to an environmental review to verify that they are not on the IIC’s list of excluded activities and comply with national environmental and occupational safety standards. In addition, Davivienda ES will be required to submit annual environmental reports to the IIC detailing progress in the implementation of its environmental and social management system to facilitate the evaluation of these aspects of its operations.