The purpose of the IIC loan is to finance eligible projects via subloans to eligible enterprises in Uruguay that meet IIC and Microfin Uruguay loan eligibility criteria and environmental and labor requirements. The subloans will target micro and small Uruguayan enterprises seeking short-, medium- or long-term financing to carry out their operations and that are underserved in the formal financial system. Financing on appropriate terms will make it possible to generate direct and indirect employment and improve the financial structure of micro and small enterprises. Microfinancing is underdeveloped in Uruguay and there are few institutions that are beginning to serve this segment. Microfin provides financial services and specialized products for micro and small enterprises throughout Uruguay; its main objective is to promote the socioeconomic development of lower-income households in Uruguay.
Microfin is managed by the ACP group, a not-for-profit civil association founded in 1969 in Peru and one of the main players in Latin America’s microfinance sector. It will bring the region’s best practices to the microfinance segment in Uruguay and should provide a significant demonstration effect in the sector.
Environmental Classification and Issues:
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. Each subloan must comply with national environmental and labor laws, regulations, and standards as well as IIC environmental guidelines. To enable Microfin Uruguay to better understand and enforce the IIC’s environmental and labor requirements, the institution must retain at least two representatives who attended the IIC financial intermediary environmental training workshop.