Financing Program for Small Financial Intermediaries (IFIP)
The Financing Program for Small Financial Intermediaries (IFIP) is the IIC's response aimed at supporting small and medium-sized financial institutions in broadening and diversifying their sources of funding through medium- and long-term loans, subordinated loans, and credit transaction guarantees.
This Program includes regulated and unregulated financial intermediaries, as well as companies specializing in certain business areas, such as leasing, factoring, microfinance, and cooperatives.
IFIPs will allocate these resources to MSMEs for capital goods or working capital financing in keeping with the standards currently used by the IIC in its operations with financial intermediaries. To a lesser extent and in line with the IIC’s historical activity, these resources could finance mortgage loans for low- and middle-income housing, as defined in each country.
Main Objectives of the IFIP Program
- Increase the availability of financing for MSMEs.
- Increase the availability of credit for micro, small, and medium-sized enterprises, the source of the most demand for credit from these financial intermediaries; and, to a lesser degree, increasing the availability of private financing for low- and middle-income housing.
- Support the improvement of the technical profile and corporate governance of IFIPs included in the Program when necessary through the provision of technical assistance resources.
- Train IFIPs to implement environmental risk management as part of their internal policies, in accordance with the IIC’s policies.
Individual Sublimits per Operation:
- Senior Loans and Credit Guarantees on senior loans: up to US$7.000.000 or its equivalent in local currency.
- Subordinated Loans and Credit Guarantees on subordinated loans: Up to US$3.500.000 or its equivalent in local currency.
IFIP Program Benefits
IFIP Program Benefits include:
- The senior loans will have a term of up to five years, and the subordinated loans will have a term of up to eight years.
- Fixed or variable annual interest rates/guarantee fees, according to market conditions and the risk taken on.
- Flexible repayment: To be determined for each operation.
- Security: Security will be determined according to market conditions and the financial intermediary in questiion to the IIC's satisfaction.
- Equity / Assets: Bank: Greater than 10%. Nonbank: Greater than 13%.
- Total Equity of up to US$70 million.
- Return on Equity (ROE) – average over the last three years: Greater tan 5%.
- Each institution must have been in operation for at least four years.
- Each institution must demonstrate that it has established credit policies, credit methodologies, and information systems for conducting its lending activities to the IIC’s satisfaction.
- Their management and administration must have proven experience in the field.
- Each institution must operate and be established and domiciled in the country where they receive the financing and the country must be an IIC regional member.
- All the Program’s operations must comply with all applicable provisions of IIC’s policies, including the Operating Policy, Environmental and Social Sustainability Policy, and the Framework to Prevent and Combat Fraud and Corruption.