The project consists of a loan to Bancop. The purpose of this IIC operation is to help Bancop increase its loan operations for medium-term projects with Paraguay’s small and medium-sized enterprise sector, including rural producers, through loans to producers’ cooperatives and/or small or medium-sized producers, thereby promoting crop and livestock production in Paraguay.
On January 31, 2012, the Central Bank of Paraguay (BCP) issued Bancop a license to operate, and on July 16, 2012, the bank opened its doors to the public. Paraguay’s first cooperative-owned bank, Bancop currently has 27 producers’ cooperatives as shareholders. Its purpose is to provide long-term loans to cooperatives, their members, and any other customer interested in working with it, thus boosting their productive capacity.
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. To enable the Borrower to better understand the IIC’s requirements, it shall be required to attend the IIC’s environmental training workshop for financial intermediaries. Each subproject shall be subject to an environmental review and must comply with national environmental and labor laws, regulations, and standards, as well as IIC environmental guidelines. Bancop is working on an environmental risk management system that will be integrated into its credit risk assessment system. This will allow the bank to identify, quantify, and classify risks, thereby enabling the officers responsible for the credit approval process to take appropriate action. Bancop must also submit annual environmental reports to the IIC indicating the progress made and problems encountered in the implementation of these practices.