The project consists of a long-term IIC loan of up to US$15 million to Scotiabank El Salvador. The proceeds of the loan will be used to finance home purchases by middle- and lower-middle-income individuals, and to fund loans for the productive activities of Salvadoran SMEs operating in a variety of economic sectors.
Scotiabank El Salvador is the second largest bank in El Salvador. Its activities focus primarily on lending to individuals, with an emphasis on the residential mortgage financing sector, where it is the market leader. Scotiabank El Salvador serves its customers through its national network of 53 branch offices, 133 automatic teller machines, and 4 secure ATM vestibules.
Environmental and Labor Issues:
This is a category FI-3 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 low risk. 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.
Scotiabank El Salvador is part of the Bank of Nova Scotia (BNS) Group, which has a corporate social responsibility policy in place to manage the environmental and social risks associated with its financial operations. BNS Group is also a signatory of the Equator Principles, which have become the financial industry standard for environmental and social risk management in project finance.
To enable the Borrower to better understand the IIC’s requirements, Scotiabank El Salvador will be required to attend the IIC’s environmental training workshop for financial intermediaries. Moreover, Scotiabank El Salvador will be required to submit annual environmental reports to the IIC detailing the progress made in the implementation of its environmental and social risk management system for the evaluation of these aspects of its operations.