Program for Funding Microfinance Institutions in Peru (IMIF Program)
The IIC will provide funding for microfinance institutions (IMIFs) in the amount of up to US$15 million, of which IMIFs will be able to use up to US$15 million to grant loans and up to US$8 million for subordinated loans. IMIFs will channel the funds to individuals, microenterprises, and small enterprises to provide financing for home purchases, improvements, expansions, or remodelings, or for working capital or, in general, for expansion needs of microenterprises or small enterprises.
The IMIF Program seeks to establish a framework to facilitate loan and subordinated loan operations with regulated microfinance institutions in Peru, of which there are around forty. Microfinance institutions have been regulated for several years in Peru and conform one of the most outstanding industries region-wide in Latin America and in Peru.
The Program covers institutions such as Cajas Municipales de Ahorro y Crédito (CMAC), Cajas Rurales de Ahorro y Crédito (CRAC), Entidades de Desarrollo de la Pequeña y Microempresa (EDPYMES), financieras, and some banks specializing in microenterprises.
The Program’s main objectives are: to increase and diversify IMIF funding sources through loans, improve their asset and liability matching through medium- and long-term loans, foster IMIF growth by strengthening their capital base, make environmental compliance a part of each IMIF’s credit evaluation procedure consistent with IIC guidelines and criteria, and channel financing to some 3,000 microenterprises and small enterprises.
This is a category III project according to the IIC’s environmental and labor review procedure because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria. To enable the Borrower to better understand the IIC’s requirements, each IMIF shall be required to attend the IIC financial intermediary environmental training workshop. Each subproject will be subject to an environmental review and must comply with national environmental and labor laws, regulations, and standards as well as IIC environmental guidelines.